here - Mewah Group

GlobalBrandsLocalFavouritesMEWAH INTERNATIONAL INC. ANNUAL REPORT 2010

Sales volume of3.9million M.T.We are a globalagri-businessfocused on edibleoils and fatswith refi neriesand processingfacilities in Malaysiaand Singapore,established brandsand sales in over100 countries.

Sales in over100countriescontentscorporate profi le 04 chairman’s message 10 ceo’s message 11 board of directors 13group structure 17 operations and fi nancial review 20 forward looking strategy 26risk management 28 research and development 30 corporate social responsibility 31corporate governance 33 fi nancial statements 43 ipo proceeds and material contract 124statistics of shareholdings 125 notice of annual general meeting 127 corporate information 133

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Mewah has come a long way since our humble beginnings – importingRBD palm oil and RBD palm olein from refineries in Johor, Malaysia,repacking them in our facilities in Singapore and distributing them locally.Today, we are one of the largest edible oils and fats businesses in Asiawith a current total refining capacity of 8,000 M.T. a day or 2.8 millionM.T. annually. Our growth journey has not ended. With our listing inNovember 2010 and our growth plans, a new chapter in our journey isjust unfolding.

4MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010CorporateProfi leMewah Group is an integrated agri-business focused onedible oils and fats. One of the largest palm oil processors inthe world by capacity, Mewah Group produces a wide rangeof refi ned and fractionated vegetable oils and fats principallyfrom palm oil, as well as from lauric oils, such as palm kerneloil and coconut oil, and from soft oils, such as soybeanoil, canola oil, sunfl ower seed oil and corn oil. Featuring anintegrated operations throughout the edible oils and fats valuechain, from the sourcing and processing of raw materials, tothe packing, merchandising, shipping and distribution of theproducts, Mewah Group’s products are sold to customers inmore than 100 countries – both under our own brands andthe brand names of our customers.The Group has been in operation since the 1950s. Sincethen, we have established packing operations importing RBDpalm oil and RBD palm olein from refi neries in Johor, Malaysia,repacking them in the facilities in Singapore and distributingthem fi rst in Singapore and later, globally. In 1987, the Groupcommenced refi ning crude palm oil in our fi rst refi nery inSelangor, Malaysia with a production capacity of 400 M.T. aday or approximately 140,000 M.T. annually.Today, the Mewah Group has grown to be one of thelargest edible oils and fats businesses in Asia with a currenttotal refi ning capacity of 8,000 M.T. a day or 2.8 millionM.T. annually. The Group currently has three refi neries andprocessing plants located in Semenyih, Pasir Gudang andWestport, Malaysia, two packing plants in Malaysia and onepacking plant in Singapore.Our BusinessOur operations are integrated throughout the value chain ofedible oils and fats, from sourcing of raw materials, refi ning,processing, packing, branding, to marketing and distributingto end customers.Our midstream operations include producing of a wide rangeof refi ned and fractionated vegetable oils and fats principallyfrom palm oil as well as from lauric and soft oils. Our midstreamoperations are supported by strategically located, large scaleintegrated manufacturing processing facilities close to thesource of raw materials. Our downstream operations includepacking of oils and fats under our own established brands orunder private label. Our products are currently sold to over100 countries.The integration across the value chain allows us to enjoysignifi cant operating effi ciencies through lower manufacturingand logistics costs, better quality control over our productsand increased access to market information. Our businessmodel allows us to better manage cyclicality in our industry andfl uctuations in the price of CPO and other commodities as weare less susceptible to changes in the price of commoditiesand are able to respond quickly to changes in demand, supplyand pricing for our products through our ability to produce awide variety of value-added products.Upstream Midstream DownstreamCustomers• Plantation• Milling• Refi ning palm oil• Specialty fats• Applicationsdevelopments• Consumer packs• Branding• Private Label• Sale / marketing• Distribution

MEWAH INTERNATIONAL INC.ANNUAL REPORT 20105CorporateProfi leBusiness SegmentsThe Group’s business consists of two business segmentsnamely the Bulk segment and Consumer Pack segment.Bulk SegmentOur bulk segment produces and sells vegetable-based edibleoil and fat products in bulk. These products are refi ned andfractionated from palm oil, lauric oils, and soft oils. The mainbulk edible oils and fats we produce are RBD palm oil, RBDpalm olein and RBD palm stearin. RBD palm oil is a majorcomponent used in the manufacture of margarines andshortenings and is also used for frying. RBD palm olein ismainly used as cooking oil and in industrial applications forprocessed foods such as fries and chips. RBD palm stearinis used mainly to manufacture margarine, shortenings, soapsand detergents.We also produce specialty fats and oils in bulk form. Thesespecialty fats and oils products are used for cocoa butter anddairy products. We sell our specialty fats and oils in bulk formprimarily to distributors and factories involved in the productionof confectionery, bakery products and other food items.We source the raw materials for our bulk edible oils and fatsdivision, primarily palm oil as well as lauric oils and soft oils,mainly from suppliers in Malaysia where our manufacturingoperations are located, or from Indonesia and South America.Our bulk edible oil products are sold to refi ners, processers,wholesalers and retailers in the food, animal feed andoleochemicals industries.Consumer Pack SegmentOur consumer pack products division produces and sellsvegetable-based edible oil and fat products in the form ofconsumer packs to end customers under our own housebrands and under the brands of third parties. We also sellspecialty oils and fats in consumer pack form under our ownhouse brands.Our specialty fats and confectionary oils sold in consumerpack form are sold under our own brand names, such as‘Moi’ and ‘Oki’, primarily to distributors and factories involvedin the production of confectionery, bakery products and otherfood items.The raw materials for our consumer pack products areprimarily palm, lauric and soft oils that are sourced in bulk,together with the raw materials for the rest of our businessdivisions from suppliers located in Malaysia. Our consumerpack products are produced at our Westport and PasirGudang refi neries in Malaysia and at our packing plantsin Malaysia and Singapore. We manufacture some of ourown packaging for our consumer pack products at ourpacking plants in Malaysia and purchase the remainder ofour needs from third parties. Our consumer pack productsare marketed and sold through our sales offi ces locatedin Singapore, Malaysia, Australia, China, India, Europe,Russia and Africa to more than 100 countries around theworld.BulkSourcingof rawmaterialsRefiningandprocessingRefinedproductsSales,marketinganddistributionCustomersSourcingof refinedproductsFurtherprocessingConsumer PackPackingConsumerpackproductsSales,marketinganddistributionCustomers

6MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010CorporateProfi leManufacturing OperationsWith current refi ning capacity of 2.8 million M.T. per annum,we are the second largest palm oil processor in Malaysia andsixth largest in the world, by installed capacity 1 . The averagesize of our refi nery plants is the largest in Malaysia 1 . The largesize of our plants enables us to achieve economies of scaleas we are able to spread capital expenditures and fi xed costsover a large volume of products produced and lower our costof production per M.T. at each plant.We currently have three refi neries in Malaysia, two packingplants in Malaysia and one packing plant in Singapore. Ourrefi neries in Westport and Pasir Gudang are situated nearports that are located along major shipping routes and havepumping facilities that allow us to receive CPO supplies fromand to deliver our bulk products to sea-calling vessels directly.Our plant at Semenyih is strategically located inland nearmany of our local customers. All our refi neries and packingplants are strategically located to have easy access to rawmaterials, our customers or distribution and transportationfacilities and reduces the time to market of our products whichlowers our costs. Apart from the refi ning of CPO and CPKO,our facilities in Malaysia are also able to carry out a wide varietyof other functions, such as fractionation and hydrogenation,neutralising, winterising and texturising, which allows us toproduce a variety of products, and to custom make productsfor our customers. With over 90% of capacity utilisation, ourrefi neries are one of the most effi ciently run refi neries in theworld.All our refi neries and processing facilities are ISO certifi edto provide assurance to our customers that our qualitymanagement systems meet specifi c standards. We have alsoreceived various other accreditations and certifi cations, suchas Halal and HACCP certifi cations, which allow our productsto be sold in a wider variety of markets to a broader range ofcustomers.1Based on a report by LMC International Limited.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 20107CorporateProfi leMerchandising and Global DistributionCapabilitiesWe sell and distribute our bulk and consumer pack productsto more than 100 countries in the Asia Pacifi c, the Indiansub-continent, Middle East, Africa and Europe through awell-established global sales and distribution network. Wedistribute our products through our own distribution network ofsales and marketing offi ces in Singapore, Malaysia, Australia,China, India, Europe, Russia and Africa. In addition, we employa multi-cultural marketing team which gives us a competitiveadvantage in accessing and understanding the respectivelocal markets. Besides that, the strength of our merchandisingand distribution also lies in the high and consistent quality ofour products. We are able to specially develop products tomeet our customers’ specifi cations and to assist them inthe design, packaging and branding of products under theirrespective brands. This has allowed us to develop strongrelationships with our key customers around the world, manyof whom are well-known large food companies, by providingthem with timely and reliable supplies of their edible oil and fatneeds.Consumer BrandsWe have a wide range of consumer pack products marketedunder our house brands, such as ‘Oki’, ‘Mona’, ‘Moi’, ‘Krispi’,‘Deli’, ‘Turkey’, ‘Cabbage', ‘Mewah’ and ‘Fry-ola’, manyof which we believe are established and well-recognisednames. We believe our ‘Oki’ and ‘Moi’ brands of edible oilsare some of the leading brands of edible oils in Africa. Ourconsumer pack products are available in countries in theAsia Pacifi c, the Indian sub-continent, Middle East, Africaand Europe.Through more than 50 years of experience in establishingand promoting our brands, we believe we have developedand obtained in-depth knowledge of the types of products,packaging, pricing and display that will appeal to consumersin the markets we target. As such, we believe we are wellpositioned to take advantage of potential growth markets forour consumer pack products.

With the support of dedicated sales teams globally, based in Singapore andMalaysia, and regional sales teams located in Australia, China, Europe, Russiaand India, Mewah has a strong distribution network. Effectively, we deliver ourproducts to customers in more than 100 countries.globalgrowthlocalsuccess

With the support of dedicated sales teams, based in Singapore andMalaysia, and regional sales teams located in Singapore, Malaysia,Australia, China, India, Europe, Russia and Africa, Mewah has a strongdistribution network. Effectively, we deliver our products to customersin more than 100 countries.

10MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Chairman’sMessage2010 was a milestone year for thecompany when it got listed on theMain Board of the Singapore StockExchange on November 24, 2010.After running the business for overfi ve decades as a closely held familybusiness, the company went public toshare the fruits of its success with thepublic at large. Getting publicly listedhas opened a new chapter in the life ofthe company with new opportunitiesand new challenges ahead.Financial Year 2010 was a very satisfying yearfor us when our robust business delivered yetanother set of strong fi nancial performancedespite tough global economic environmentand volatile commodity prices. With a net profi tof US$92.4 million, the company achievedearnings per share of US cents 7.08 per shareand an impressive return on equity of 38.8%.More importantly, we ended the year with a muchstronger Balance Sheet with a total equity ofUS$509 million and a conservative debt to equityratio of 0.64. Our Balance Sheet is stronger thanever to support our growth strategy.I would like to take this opportunity to thank andcongratulate the entire Mewah team on makingthe company a success story. While I thank thepromoter shareholders who have supported usall this while, I also welcome new public investorsand the independent directors and thank themfor showing their confi dence in the business andour future growth plans.Throughout the year, we have remainedfocused on succession planning. The Grouphas continued to invest in human resourcesdevelopment to ensure enhanced capacityand adequate human capital for our ambitiousexpansion plans. The management continues toroll-out its strategic plan continually reassessingits long term goals and has continued with itssuccession planning path in all areas of thebusiness. Our employees are commended fortheir continued loyalty, commitment to excellenceand support in helping the Group achieve thebest performance possible.The Group has continued to invest and expandin areas it believes are important, includingexpansion of the research and developmentteam to assist in driving innovation and thedevelopment of new product ranges designedto focus on meeting the needs of our customers.While the public listing opens up opportunitiesfor us to take the business to new heights, it alsoadds additional challenges for the Companyto meet increased expectations from all ourstakeholders. We have laid strong foundationsover the last fi ve decades and we are confi dentof meeting and exceeding the expectations.We believe we have a compelling story and welook forward with great passion to the future,creating greater value for our shareholders.Dr Cheo Tong ChoonChairman and Executive Director

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201011CEO'sMessageFinancial Year 2010 was a year of layingthe foundation to start a new chapterof growth. We delivered a robust andconsistent fi nancial performance foranother year amidst volatile marketconditions. We further strengthenedour already strong fi nancial position byraising more equity through an initialpublic offer to support our growthplans. During the year, we acquiredcontrolling stake in our distributor inWest Africa which will not only broadenour market reach but also open doorsto manufacture and distribute otherproducts having synergies with ourcurrent business. During 2010, we alsoinitiated various expansion projectsincluding a refi nery with a capacity of525,000 M.T. increasing the capacityfor specialty fats by 210,000 M.T., aconsumer packs project to producesoap and shortenings. A new chapterin our journey is just unfolding!Review of FY 2010Mewah delivered a robust, stable and consistentfi nancial performance for the year 2010 despitetough global economic environment and volatilecommodity prices. Tough market conditions andvolatile market conditions were test of our robustand operationally fl exible business model thathas been delivering consistent earnings and wepassed the test with fl ying colours. Our net profi tUS$92.4 million was 3.1% higher than last year.Excluding exceptional items i.e. IPO expenses,our net profi t of US$97.2 million was 8.4%higher than the last year. The company achievedearnings per share of US cents 7.08 per share.Our sales of 3.85 million M.T. were 37.6% higherthan our current refi ning capacity of 2.8 millionM.T. adding to our confi dence that we will beable to accelerate the capacity utilisation forour new refi nery with an installed capacity ofhalf a million M.T. currently under construction.Our current refi neries continued to operateat capacity utilisation of more than 90%. Ourconsumer pack segment with higher marginsregistered an impressive growth of 20.5% in thesales volumes.Our sales remain well diversifi ed spanning over100 countries. Africa and Middle East continuesto be our strong markets for consumer packssales, contributing over 70% of the sales of thesegment.We ended the year with a much strongerBalance Sheet with a total equity of US$509million, and a conservative debt to equity ratioof 0.64. Our Balance Sheet is stronger thanever to support our growth plans.Our operational effi ciency was refl ected inour low cycle time of 43 days. Our high assetturnover ratio of 8.4 times with profi t margin of2.6%, combined with a comfortable leverage

12MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010CEO'sMessageratio of 1.8 times helped us achieve animpressive return on the equity of 38.8%.Our key success factorsOver the last fi ve decades, we have positionedourselves as an integrated edible oils and fatsbusiness participating in the attractive parts ofthe value chain. Our effi cient and strategicallylocated large scale integrated productionfacilities act as global factories closer to rawmaterial and help us to keep our cost ofproduction low, provide operational effi cienciesand provide entry barriers. We have ourown established and recognised consumerbrands that give us access to larger pool ofcustomers while creating customer loyalty. Ourwell balanced experienced management teamprovides us competitive advantage in toughmarket conditions.Preparing for the futureWith our current competitive position in theindustry we have sight on consolidating ourposition further as an integrated player ofagri-based consumer products. As a strategy,we plan to expand ranges of agri-basedconsumer products, broaden our marketingand distribution reach and invest in demanddriven production facilities.In 2010, we acquired majority stake in MollyFoods bvba that will help us to consolidateour integrated position in the downstream partof the value chain, broaden and depend ourmarketing and distribution network and openopportunities for other consumer productshaving manufacturing and distributionsynergies with our current business.We are also undertaken various expansionplans to increase our current refi ning capacityfrom 2.8 million M.T. to 3.3 million M.T.,increase specialty fats capacity from 70thousand M.T. to 280 thousand M.T., buildingfacilities to produce soap and shortening.We have set our sight to increase ourpresence in China, by setting packing plantsto start with and scale up the investmentsfor manufacturing. We are exploring otherorganic and inorganic opportunities to furtherstrengthen our position as an integrated agribasedconsumer products business. With ourwell defi ned strategy, focused demand-drivenexpansion of the business, our competitiveposition in the industry, supported by ourstrong balance sheet, we are well poised togrow further.We believe that there will be many opportunitiesfor us in the near future. Overall, our focus isto continue to build sustainable growth, andcontinued profi tability to create long term valuefor all our stakeholders.I would like to take this opportunity tothank our employees, suppliers, customers,bankers and shareholders for their support inhelping to make 2010 a successful year forus as a Group. We are also grateful for thecontinued partnership and confi dence in theCompany.Michelle CheoChief Executive Offi ce & Executive Director

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201013Board ofDirectorsDr Cheo Tong Choon @ Lee Tong ChoonDr Cheo Tong Choon @ Lee Tong Choon is our Chairmanand Executive Director. He is responsible for the overallstrategy and direction for the Group. Dr Cheo has more than20 years of experience in the edible oils and fats business.He was responsible for establishing the Mewah Group ofcompanies in Malaysia, which included Ngo Chew HongOils & Fats (M) Sdn Bhd, Mewaholeo Industries Sdn Bhdand Mewah-Oils Sdn Bhd. Dr Cheo also established oursubsidiary, Moi Foods Malaysia Sdn Bhd, which is primarilyin the business of packing and marketing consumer packproducts. Dr Cheo is responsible for setting the strategicdirection of our Group and under his direction, our Grouphas expanded into refi ning, manufacturing and trading ofpalm oil and related products.Dr Cheo obtained a Doctor of Medicine (MD) degree fromthe University of Saskatchewan, Canada and is a memberof the Royal Colleges of Physicians of the United Kingdomin internal medicine. He practised as a registered medicalpractitioner from 1975 to 1986 with a group of medicalspecialists, Drs Bain & Partners in Singapore, before hebecame our Chairman and Executive Director.Ms Michelle Cheo Hui NingMs Michelle Cheo Hui Ning is an Executive Director and ourChief Executive Offi cer. She has overall responsibility forour corporate risk management, production and systemsand technical processes. She is responsible for the bulksegment of our business, including sales, formulationof strategy and execution. Ms Cheo joined our Groupin 2003 and along with the Executive Chairman, she isresponsible for managing the overall strategic directionof the Group, which involves managing the operations,projects and organisation of the Group. Prior to joiningour Group, Ms Cheo worked with Exxon Mobil from 1997to 2003.Ms Cheo graduated in 1997 and holds a ChemicalEngineering degree from Imperial College, Universityof London. She also obtained a Master of BusinessAdministration degree from INSEAD in 2004.Ms Bianca Cheo Hui HsinMs Bianca Cheo Hui Hsin is an Executive Director andour Chief Operating Offi cer. She joined our Group in 2004and now heads the consumer pack segment, and hasoverall responsibility for our human resource, fi nancialmanagement, marketing, organisational development andIT systems. Prior to joining our Group, Ms Cheo practisedlaw in Singapore with Allen & Gledhill LLP from 2000 to2003 and with Norton Rose LLP from 2003 to 2004.Ms Cheo graduated from the King’s College Universityof London, with a degree of Bachelor of Laws in 1998and she was admitted as an advocate and solicitor of theSupreme Court of Singapore in 2000.Mr Cheo Seng JinMr Cheo Seng Jin is an Executive Director and Headof Commercial. He is responsible for the strategy forsales and marketing. Mr Cheo has gained more than 20years of experience in the edible oils and fats industry inSingapore and China whilst working with our subsidiary,Ngo Chew Hong Edible Oil Pte. Ltd. He presently sitson the board of directors of some of our subsidiaries.Mr Cheo also assisted in establishing our Group’ssubsidiaries, MOI International (Australia) Pty Ltd inAustralia and Moi Foods (Shanghai) Co. Ltd. in China,which operate as our marketing offi ces for our consumerpack segment in those countries.Mr Cheo obtained a Bachelor of Science degree fromthe University of Singapore (now known as the NationalUniversity of Singapore) in 1972.

14MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Board ofDirectorsMs Leong Choi FoongMs Leong Choi Foong is an Executive Director and ourGroup Treasurer. Ms Leong joined the Group in 1990 asthe Finance Manager of our subsidiary, Ngo Chew HongOils & Fats (M) Sdn Bhd, and subsequently as the GroupFinancial Controller of our subsidiary, Mewah-Oils SdnBhd, until her most recent appointment with our Company.Prior to joining our Group, Ms Leong worked as a tax andaudit assistant with Othman Hew & Co. between 1980 and1983 and as a fi nancial and management accountant atSouthern Bank Berhad, which is now part of CIMB BankBerhad, between 1984 and 1990, where she was in chargeof the Group’s fi nancial and management reporting.Ms Leong obtained a Bachelor of Accounting degree fromthe University of Malaya in 1980. She is a member of theMalaysian Association of Certifi ed Public Accountants anda chartered accountant certifi ed by the Malaysian Instituteof Accountants.Ms Wong Lai WanMs Wong Lai Wan is an Executive Director and Head ofRisk Management. Ms Wong joined our Group in 1987 as achemist. During her 23 years with our Group, she has heldvarious portfolios in quality control, production, operations,logistics, marketing, trading and business development.In 2005, she became our Executive Vice President andHead of Risk Management. She is currently responsible forthe overall business operations and risk management ofour Group. Ms Wong started her career with Pan CenturyEdible Oils Sdn Bhd as a chemist from 1985 to 1987.Ms Wong graduated with a Bachelor of Science degreein Chemistry with First Class Honours from UniversitiKebangsaan, Malaysia in 1985.Mr Giam Chin ToonMr Giam Chin Toon is our Lead Independent Director. Hewas appointed to our Board of Directors on October 29,2010 and is the Chairman of the Nomination Committeeand Remuneration Committee. He is also a member of theAudit Committee.Mr Giam is a senior partner of the law fi rm of Wee SweeTeow & Co. Mr Giam was appointed Senior Counsel in1997. He was President of the Law Society of Singaporebetween 1987 and 1989, and remains actively involvedin the activities of the Law Society of Singapore and theSingapore Academy of Law. Mr Giam joined the Singaporelegal service in 1967 and was a magistrate when he leftthe legal service in 1970. He has served as arbitrator andcounsel in many arbitral and court proceedings.Mr Giam is active in the commercial fi eld holdingdirectorships and appointments in private and public listedcompanies as well as institutions. These include the boardsof Ascott Residence Trust Management Limited, GuthrieGTS Limited, the Singapore Mediation Centre and the InlandRevenue Authority of Singapore. He has previously servedon the boards of Oversea-Chinese Banking CorporationLimited, SembCorp Marine Limited, the Singapore Instituteof Directors, Health Sciences Authority, Energy MarketAuthority, and Raffl es Holdings Limited.Mr Giam is Singapore’s Ambassador (Non-Resident) toPeru and High Commissioner (Non-Resident) to Ghana.Mr Giam graduated from the University of Singapore in1967 with a Bachelor of Laws (Honours) and a Masters ofLaw degree in 1969.Tan Sri Dato’ Ir Muhammad Radzi Bin HajiMansorTan Sri Dato’ Ir Muhammad Radzi Bin Haji Mansor is anIndependent Director. He was appointed to our Boardof Directors on October 29, 2010 and is a memberof our Nomination Committee, Audit Committee andRemuneration Committee. Tan Sri Ir Radzi served theGovernment of Malaysia in various engineering andmanagement roles between 1965 and 1986 at JabatanTelekom Malaysia including a three year secondmentas a technical advisor to the Ministry of Energy,Telecommunications & Post in Malaysia between 1976and 1979. He was appointed as Director General JTMin 1985 and retired in 1987 with the corporatisation ofJabatan Telekom Malaysia. He opted into the successorcompany, Telekom Malaysia Berhad, as Director of

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201015Board ofDirectorsOperations, Director of Marketing and Customer Serviceand Director of Regulatory Management and ExternalAffairs between 1987 and 1996. From 1997 to 1999,Tan Sri Ir Radzi was retained as a Consultant/Advisor tothe Multimedia Development Corporation Sdn Bhd andhe is currently a member of its board of directors. FromJuly 1999 to July 2009, Tan Sri Ir Radzi was Chairman ofTelekom Malaysia Berhad and its group of companies.Tan Sri Ir Radzi is currently Chairman of Kumpulan FimaBerhad (Malaysia), Chairman of Menara Kuala LumpurSdn Bhd, President-Commissioner of PT XL Axiata Tbk(Indonesia), a director of Pos Malaysia Berhad and amember of the APEC Business Advisory Council (ABACMalaysia).Tan Sri Ir Radzi graduated with a Diploma in ElectricalEngineering from Faraday House Engineering College,London in 1962, and a Master of Science degree inTechnological Economics from the University of Stirling,Scotland in 1975. A registered engineer with the boardof Engineers Malaysia and Engineering Council, UnitedKingdom, he is a corporate member of the Institutionof Engineers Malaysia, the Institution of Engineeringand Technology, United Kingdom and the CharteredManagement Institute, United Kingdom.Tan Sri Ir Radzi was made an Honorary Fellow by theASEAN Federation of Engineering Organisation in 2004and was made a Fellow of the Institute of MarketingMalaysia and a Fellow of the Institute of Directors,Malaysia in 2007. Tan Sri Ir Radzi was appointed as thePro-Chancellor of Multimedia University in 2008.Mr Lim How TeckMr Lim How Teck is an Independent Director. He wasappointed to our Board of Directors on October 29,2010 and is the Chairman of the Audit Committee. Heis also a member of our Remuneration Committee andNomination Committee.Mr Lim is currently Chairman of Redwood InternationalPte. Ltd. (an investment & consultancy company).Mr Lim has an in-depth knowledge of the shippingindustry and the Neptune Orient Lines Limited (“NOL”)group of companies (the “NOL Group”), having been withthe NOL Group from 1979 to 2005. He held directorshipsin various subsidiaries, associated companies andinvestment interests of the NOL Group. In NOL, he heldvarious positions from Executive Director, Group ChiefFinancial Officer, Group Chief Operating Officer andGroup Deputy Chief Executive Officer.Mr Lim has extensive international qualifications andexperience in business finance and accounting. Priorto joining NOL, he worked in Coopers & Lybrand (aninternational accounting firm) and Plessey Singapore (amultinational trading and manufacturing company).Mr Lim holds a Bachelor of Accountancy Degree from theUniversity of Singapore. He is a Fellow of the CharteredInstitute of Management Accountants of UK (FCMA), aFellow of the Certified Public Accountants of Australia(FCPA Aust), a Fellow of the Institute of Certified PublicAccountants of Singapore (FCPA ICPAS), a Fellow of theSingapore Institute of Directors (SID) and an Associateof the Business Administration of Australia (AIBA). He isa graduate of the Harvard Graduate School of BusinessCorporate Financial Management Course and AdvancedManagement Program in 1983 and 1989 respectively.Mr Lim’s other appointments include being Chairmanof Certis CISCO Security Pte. Ltd., ACAL Holdings Pte.Ltd. and ARA-CWT Trust Management (Cache) Limitedand is also Deputy Chairman of Tuas Power Ltd. Heis also a director of PNG Sustainable DevelopmentProgram Limited, IFS Capital Limited, Jurong Port PteLtd, ACAL Underwriting Limited (UK), Rickmers TrustManagement Pte. Ltd., ARA Asset Management Ltd,The Foundation for Development Cooperation, TheFoundation for Development Cooperation Limited(Singapore) Ltd, The Foundation for DevelopmentCooperation Limited Pacific Ltd, Accuron TechnologiesLimited, Swissco Holdings Limited. He was awardedThe Public Service Medal (Pingat Bakti Masyarakat)National Day Award in 1999, The Service to EducationMedal (Singapore Ministry of Education) in 2000 and2002, and The Gold Service Medal (Singapore CivilDefence Force) in 1996.

16MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Board ofDirectorsTan Sri Datuk Dr Ong Soon HockTan Sri Datuk Dr Ong Soon Hock is an IndependentDirector. He was appointed to our Board of Directors onOctober 29, 2010. He is also a member of our NominatingCommittee.Tan Sri Datuk Dr Ong is currently an adjunct professorat the University of Malaya, where he is attached to theDepartment of Chemistry and the Faculty of Economic andAdministration. Prior to joining the University of Malaya in2007, Tan Sri Datuk Dr Ong was the Chief Operating Offi cerof Country Heights Education Sdn Bhd from 1996 to 1998.Tan Sri Datuk Dr Ong has an in-depth knowledge of thechemistry and technology associated with the palm oilindustry, having actively contributed to palm oil relatedresearch and the palm oil industry for more than 36 years.Tan Sri Datuk Dr Ong was a director of the Malaysian PalmOil Promotion Council from 1990 to 1996, and was DirectorGeneral of the Palm Oil Research Institute of Malaysia from1987 to 1989, where he remained as an advisor until 1990.Prior to joining the Palm Oil Research Institute of Malaysia,Tan Sri Datuk Dr Ong was a professor at the University ofScience Malaysia from 1970 to 1981, and a lecturer at theUniversity of Malaya from 1959 to 1970.Tan Sri Datuk Dr Ong’s contributions to the palm oilindustry have led to his receiving several awards, includingthe Distinguished Science Alumni Award from the NationalUniversity of Singapore in 2006, the Malaysian Scientifi cAssociation Golden Jubilee Award in Oil Palm Research in2005, the First Asian Achievement Award for Research andDevelopment by the Asean Institute in 1992 and the FirstAward for Distinguished Contribution to Economic Advancewith respect to Palm Oil for 1990/1991 by the Federationof Asian Chemical Societies in 1991. Tan Sri Datuk Dr Onghas over 36 years of research and development experiencein lipid chemistry, and is the registered holder of 16 patentsin the fi eld of palm oil related technology.Tan Sri Datuk Dr Ong graduated with a Bachelor of Sciencedegree with First Class Honours from the University ofMalaya in 1958, and obtained a Master of Science fromthe University of Malaya in 1959. Tan Sri Datuk Dr Ongobtained a Doctor of Philisophy (PhD) in organic chemistryfrom King’s College University of London in 1963.Tan Sri Datuk Dr Ong is a Senior Fellow of the Academy ofSciences Malaysia with the title “Academician”, and wasappointed as an Emeritus Professor of the University ofScience, Malaysia in 2007. He has been the President ofthe Malaysian Oil Scientists and Technologists Associationsince 1987, the President of the Malaysian Inventionand Design Society since 1986 and the President of theMalaysian Federation of La Sallian Associations since2008. Recently, he was conferred Fellowship of King’sCollege, London.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201017GroupStructure(As at 31 December 2010)“Mewah International Inc(f.k.a Moi International Holdings Inc)”Moi International Inc100% 100%One Marthoma (CI)IncHua Guan Inc100% 100% 100%Pandan LoopInternational IncCavenagh HouseInternational Inc83.4%MOIInternational(Australia)Pty LtdMewahOleoMalaysiaSdn Bhd100% 100% 100%Padat GayaSdn BhdNgo ChewHongCorporationPte LtdHua GuanOleo (S)Pte Ltd90%100% PT 95% PT Utara 95%SeengattaAgro [N1]Palm [N1]FrycyclePty Ltd100%Mewah-Oils SdnBhd100%MewaholeoIndustriesSdn Bhd100%Mewah Oils100%& Fats PteLtdMewah OilsIndiaPvt Ltd10%Ngo ChewHong Oleo(S) Pte Ltd100% Cavenagh100%Oleo (S)Pte LtdMoi FoodsMalaysiaSdn BhdNgo ChewHong Oils& Fats (M)Sdn BhdContainerFabricator(M) SdnBhdG & UDistricenters(M) Sdn Bhd100%100%100%100%Mewaholeo 100%MarketingSdn BhdMewahDatu SdnBhd (f.k.aMewah-OilsSabah SdnBhd)MewahCommoditiesPte Ltd100%50%Ngo ChewHongEdible OilPte LtdMOIInternational(Singapore)Pte LtdMewahBrands (S)Pte LtdKrispi OilAnd FoodProductsMarketing,Import,ExportTradingCompany(Turkey)100%100%100%100%100%100% 100%50%Ngo ChewHongIndustriesPte Ltd [N5]Ngo ChewHongInvestmentPte Ltd [N5]Moi FoodsRomaniaSRLMewah Oils(ZJG) Co.LtdMOI Foods(Shanghai)Co Ltd100% PT Agro 95%Murni100% PT Timuran 95%AgroBatamHeightsSdn BhdNilamTekad SdnBhdBremfieldSdn Bhd100%100%100%Molly FoodsBVBA [N4]90% Krispi OilsPolandSp. z o.o.100% Krispi OilRussiaLLC90% Moi Foods(Belgium)N.V. [N3]52%10%10%PreludeGatewaySdn Bhd[N2]49%100%Bloom LandEnterprisesLimited100%Bece S.à.r.l.Note:1: In the midst of transfer to Cavenagh Oleo (S) Pte Ltd2: Acquired 49%, w.e.f. 15 Dec 20103: Incorporated on 21 December 2010, 100% owned4: Acquired 52%, w.e.f. 27 Dec 20105: Acquired 100%, w.e.f. 30 December 2010

In an increasingly competitive operating landscape, Mewahachieved yet another set of robust and consistent operationaland financial performance. Its current balance sheet is poised tosupport the growth strategy.

globalpresenceregionaloperations

20MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Operations andFinancial ReviewFINANCIAL HIGHLIGHTSFY 2007 FY 2008 FY 2009 FY 2010INCOME STATEMENTRevenue 2,705 3,276 2,867 3,533Operating Margin 79.6 176.6 182.9 184.4EBITDA 46.9 134.6 131.4 132.3Net Profi t 26.7 89.0 89.7 92.4Net Profi t excluding exceptional items 26.7 89.0 89.7 97.2Earning per share (US cents per share) 2.07 6.92 6.96 7.08Return on Equity 18.4% 52.0% 45.5% 38.8%BALANCE SHEETFixed Investments 167 169 173 223Current Investments 181 176 249 397Cash and cash equivalents 29 40 38 215Total use of funds 377 385 460 835Equity 171 190 239 509Borrowings 206 195 221 326Total sources of funds 377 385 460 835Debt:Equity 1.21 1.03 0.92 0.64Net asset value per share (US cents per share) 13.34 14.85 18.66 33.79In US Dollars (in million), unless otherwise statedSEGMENTAL PERFORMANCESegmental Performance:FY 2007 FY 2008 FY 2009 FY 2010Sales Volume (M.T.'000)Bulk 2,970 2,575 3,080 2,976Consumer Pack 608 757 727 876Total 3,578 3,332 3,807 3,852Operating Margin (US$'million)Bulk 39.7 115.1 100.5 102.2Consumer Pack 39.9 61.5 82.4 82.2Total 79.6 176.6 182.9 184.4Operating Margin per M.T. (US$)Bulk 13.4 44.7 32.6 34.4Consumer Pack 65.6 81.3 113.4 93.8Total 22.2 53.0 48.0 47.9

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201021Operations andFinancial ReviewMewah is an agri-based consumer productsbusiness, focused on palm oil related products withestablished and recognised brands and sales inover 100 countries. The bulk and consumer packsegments are well supported by cost-effi cient,integrated large scale refi neries.Palm Oil Industry Trend in 2010In 2010, palm oil industry was affected by hot anddry weather in early part of the year followed byheavy rainfall affecting the harvesting, resulting inlower production and pushing the prices high in thesecond half of 2010.For Malaysia, according to Malaysian Palm OilBoard, the average Fresh Fruit Bunch yield fell 6.3%to 18.04 M.T. per hectare and CPO productiondropped by 3.3% to 16.99 million M.T.. Total exportsof palm oil products increased by 2.8% to 23.06M.T. in 2010. Price discount between palm oiland soybean oil shrank to 9%, compared to fi veyearaverage of 17%. In December, 2010 the gapdecreased to a marginal 0.2%.Tight CPO supplies and higher demand pushed theCPO prices from the levels of RM2,500 per M.T. inthe early part of the year to over RM3,800 per M.T.by the end of the year.Consistent PerformanceDespite volatile market conditions and fl uctuatingCPO prices, the Group achieved yet another setof robust and consistent operational and fi nancialperformance. In 2010, the Group maintainedcapacity utilisation of over 90%, achieved salesvolume of 3.9 million M.T., 37.6% higher thanthe installed refi ning capacity, maintained stableoperating margins and delivered robust return onequity of 38.8% for the year.Building Capabilities2010 was also the year of building capabilitiesto take the business to next level of growth. InNovember 2010, the Group got listed on theSGX main board raising net proceeds of US$184million, strengthening the balance sheet to supportexpansion and growth plans. Expansion planswere undertaken to further strengthen the marketposition as a leading edible oils and fats processorby increasing refi ning capacity, expanding therange and capacity of specialty fats productionand further deepening the participation in thevalue chain.

22MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Operations andFinancial ReviewThousand M.T.FY 2007 FY 2008 FY 2009 FY 2010Installed Capacity 2,800 2,800 2,800 2,800Capacity Utilised 2,402 2,212 2,570 2,573Capacity Utilisation 85.8% 79.0% 91.8% 91.9%ManufacturingOur refi neries and processing plants are located inSemenyih, Pasir Gudang and Westport in Malaysia.Our facilities in Pasir Gudang and Westport arestrategically located among a high concentrationof refi neries and oleo-chemical plants, with portfacilities that are situated along international shippingroutes while our facility in Semenyih is convenientlylocated inland near many of our Malaysian localcustomers. Total refi ning capacity for the Group is2.8 million M.T.. During 2010, the Group maintainedhigh capacity utilisation of 91.9%, similar to 91.8%achieved in 2009.2,8002,800Current InstalledCapacity3,325 527 15.8%37.6%525 18.8% 5252,800 2,800IncreasedCapacity3,852Sales Volume2010Robust sales volume, substantially higherthan current installed capacityThe Group maintained high sales volume of 3.852million M.T., 37.6% higher than current refi ningcapacity of 2.8 million M.T.. Incremental sales volumewas supported by purchase of refi ned oil and relatedproducts from other manufacturers.Current sales volume is 15.8% higher than theplanned increased capacity of 3.325 million M.T.,once our fourth refi nery comes on stream in FY2012. With our current capacity utilisation of 91.9%and our current sales capabilities, we are optimisticof achieving high capacity utilisation for the newrefi nery.Consumer Pack segment reported a strong growthof 20.5% to 876 thousand M.T. in 2010, comparedwith 727 thousand M.T. in 2009. Sales for ConsumerPack segment in 2010 was 31.9% higher than 2009.Sale for the segment was supported by the Group’sincreased sale of cooking oil in West Africa.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201023Operations andFinancial ReviewWell diversified Sales RevenueSales revenue for 2010 increased by 23.2% toUS$3.533 billion. Increase in the sales revenuewas largely attributable to increased prices duringthe year. Sales revenue for the bulk segment grewby 20.2% and consumer pack segment registeredrevenue growth of 31.9%. Bulk segment contributed72% of total sales revenue, while Consumer Packsegment contributed 28% of the revenue.The Group currently sells its products to customersin over 100 countries, Africa and Middle East beingstrong markets for the Group. We review our salesbased on the billing address of the customer. Of thetotal sales, 45% of the sales were made directly todestination markets which were evenly distributedacross the globe. Africa and Middle East contributed35% and 24% of total destination sales.Most of our bulk sales are made to customers withbilling address in Malaysia or Singapore, who in turncarry the products to destination markets. In 2010,over 25% of bulk sales were made to destinationmarkets other than Malaysia and Singapore.Consumer Pack sales are made largely to thedestination markets. In 2010, Africa and Middle Eastcontributed over 70% of the sales for the consumerpack segment.Destination SaleWell diversifi eld sales throughout the world with strongpresence in Africa and Middle EastBulkOver 25% of Bulk sales directly to destination markets otherthan Malaysia and SingaporePacific OceaniaEurope3%1% Americas2%MiddleEast10%Rest ofAsia11%Singapore12%Malaysia61%Consumer PackOver 70% of Consumer Pack sales to Africa and Middle EastPacificOceania3%Europe/Americas/PacificOceania18%Asia (ExclMalaysia/Singapore)23%MiddleEast24%Americas3%Africa35%Europe7%Asia16%MiddleEast15%Africa56%

24MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Operations andFinancial ReviewOperating Margin (US$ in Millions)176.6 182.9 184.461.5 82.4 82.279.639.9115.1 100.5 102.239.7FY 2007 FY 2008 FY 2009 FY 2010Consumer PackBulkConsistent Operating Margins acrosssegmentsWe source the raw materials for our bulk edible oilsand fats division, primarily palm oil as well as lauricoils and soft oils, mainly from suppliers in Malaysiawhere our manufacturing operations are located,or from Indonesia and South America. Our bulkedible oil products are sold to refi ners, processers,wholesalers and retailers in the food, animal feedand oleochemicals industries.Our consumer pack products division produces andsells vegetable-based edible oil and fat productsin the form of consumer packs to end customersunder our own house brands and under the brandsof third parties as well as specialty oils and fats inconsumer pack form under our own house brands.As a strategy we always try to pass the cost to thecustomers, thereby targeting a minimum operatingmargin. To mitigate the price volatility in the commodityprices, we use derivatives such as forward physicaland futures contracts. We also purchase bulk edibleoil products from other processors as our currentmarketing and distribution capabilities are more thanour processing capabilities. This adds operationalfl exibility to our operations.Operating Margin per MTFY 2007TotalUS$22.2BulkUS$13.4Consumer Pack US$65.6FY 2008US$53.0US$44.7US$81.3FY 2009US$48.0US$32.6US$113.4FY 2010US$47.9US$34.4US$93.8Over the period of last fi ve decades, we havedeveloped a proven integrated business model ofparticipating in the midstream and downstream partsof the value chain in the attractive palm oil industry,built inherent operational fl exibility, developed soundrisk management practices, and established ourown brands and global distribution capabilities thathave helped us to deliver robust and consistentoperating margins.In the volatile market conditions, we have deliveredyet another set of consistent operating margins forboth business segments.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201025Operations andFinancial ReviewStrong Balance Sheet supported by publiclistingThe Group got listed on the Mainboard of theSingapore Exchange Securities Trading Limited(SGX-ST) on November 24, 2010 raisingnet proceeds of US$184 million, signifi cantlystrengthening our balance sheet to support ourgrowth plans. We have further increased anddiversifi ed our borrowing to provide us operationaland fi nancial fl exibility.Debt to equity1.21FY 20071.030.920.64FY 2008 FY 2009 FY 2010Currently our balance sheet is very strongly poisedto support the growth plans of the Group with cashand cash equivalents of US$215 million. CurrentDebt-to-equity ratio is conservatively placed at 0.64,down from 0.92 in FY 2009 and from 1.21 in FY2007.Our effi cient, large scale, integrated productionfacilities and strong distribution network continueto help us to keep our cycle time very short of 43days in FY 2010. Excluding Readily MarketableInventories, our cycle time is only 23 days.Robust Return on EquityWe have continued to deliver robust return onequity, delivering a return of 38.8% for FY 2010.We actively strive to maximising the return on theequity by :1. increasing our profi t margin by adding highermargin products, increasing our participationin the value chain, and providing value addedservices to our customers.2. Increasing asset turnover by remaining closer tosource of raw material, having integrated, largescale processing facilities and managing thesupply chain effi ciently.3. Optimising leverage, making good use ofborrowing without compromising on thesolvency and liquidity of the business.Cycle time1781810FY 2007 FY 2008 FY 2009 FY 2010Adjusted for RMIROE====ProfitmarginProfit after tax (2)_________________Sales revenue92.4_________________3,533.1Notes1) ROE is based on opening Shareholders funds.2) Profi t after tax attributable to equity holders of the Company.3) Capital employed = Total equity + Net Debtxxxx3727AssetturnoverSales revenue_________________Capital employed (3)3,533.1_________________422.2xxxx4323LeverageCapital employed (3)_________________Shareholders’ equity422.2_________________238.038.8% 2.6% 8.4 times1.8 times

26MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Forward LookingStrategyWe strive to further strengthen our position as agri-basedconsumer products business by continuing the demand-drivenexpansion of the business by increasing production capacityand expanding the range of value-added products anddistribution network.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201027Forward LookingStrategyOur StrategyOver the last fi ve decades, we have become a leadingintegrated edible oils and fats business. We strive to furtherstrengthen our position as agri-based consumer productsbusiness by continuing the demand-driven expansion of thebusiness by increasing production capacity and expandingthe range of value-added products and distribution network.To meet the objective, we have identifi ed the followingspecifi c focused strategies:Invest inefficientproductionfacilitiesto supportour strongsalesFurther consolidate theposition as an integratedplayer in the value chainBroaden and deepenmerchandising, marketingand distribution networkExpandrangeof agribasedconsumerproductsIn December 2010, the Group completed the acquisitionof 52.0% of the issued equity of Molly Foods bvba (“MollyFoods”), a company incorporated in Belgium which, throughits wholly owned subsidiary, Bloom Land Enterprises Limited(“Bloom Land”), a company incorporated in Hong Kong, owns100% of BeCe S.à.r.l. (“BeCe”), a company incorporated inTogo, involved primarily in importing commodities, includingedible oils and fats products produced by the Group, for salein West Africa. The acquisition will help us to consolidate ourintegrated position in the downstream part of the value chain,broaden and depend our marketing and distribution networkand open opportunities for other consumer products havingmanufacturing and distribution synergies with our currentbusiness.We have undertaken the following expansion plans in line withour strategy:• Increase in Refi ning Capacity: We have undertaken tobuild a refi nery with a capacity of 1,500 M.T. per day inSabah, Malaysia and expect it to be operational by thesecond half of 2012. We estimate the cost of completingthe project to be US$60.0 million. Our current sales aremore than our current refi ning capacity and we expect toreach high capacity utilisation in a short period.• Increase in Specialty Oils and Fats Capacity: We haveundertaken projects at our Westport and Pasir Gudangfacilities to expand our specialty oils and fats capacity by600 M.T. per day. We estimate the cost of completing theprojects to be US$105.0 million and expect the facilitiesto be operational by the second half of 2011.• Facilities to produce Consumer Products: We arebuilding facilities to produce consumer products suchas soap and shortening at our Westport facilities for ourconsumer pack business. The project at an estimatedcost of US$25.0 million is expected to be completed bythe second half of 2011.• China expansion: We plan to build production facilitiesin Zhangjiagang and Tianjin, China. We plan to startthe facilities with setting up of packing plants that areexpected to be operational by the second half of 2013.We intend to materialise our plans for other manufacturingfacilities in due course of time.We are exploring other organic and inorganic opportunitiesto further strengthen our position as an integrated agribasedconsumer products business. With our welldefi ned strategy, focused demand-driven expansion ofthe business, our competitive position in the industry,supported by our strong balance sheet, we are well poisedto growth further.

28MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010RiskManagementIn 2010, various market factors, including changes in supplyand demand, changes in political climate in various regions,and a weak US dollar, led to high volatility in the prices ofagricultural commodities in the industry. Continuous changesin market conditions in our business create risk conditions thatcould result in potential losses.As a result of our Group’s global operating and fi nancingactivities, we are exposed to various types of market risks,including fl uctuations in agricultural commodity prices, foreigncurrency exchange rates, interest rates, counterparty creditand liquidity risk. We use certain fi nancial instruments tohedge the risk of commercial exposures and we do not holdsuch fi nancial instruments for trade or speculative purposes.These market risk management activities are governed by ourrisk management system that is designed to identify, quantifyand control various risks encountered in our operations andminimise the adverse effects from the unpredictability offi nancial market risks on our fi nancial performance.Our system comprises of processes and policies designedto address risks such as commodity prices, foreign currencyexchange rates, interest rates, counterparties’ credit andliquidity.Our risk management system is based on the following mainprinciples:Risk governance structureThe on-going compliance of these risk managementprocesses and policies are carried out by the heads of therespective operating units. Our risk governance structureconsists of a team of employees led by Ms Wong Lai Wan in theRisk Department of our Singapore offi ce, who is responsiblefor, among others, monitoring and improving the overalleffectiveness of our risk management system, the review andsetting of trade positions and limits to manage our overallrisk exposure. The Risk Department monitors and assessesrisks on a daily basis and holds weekly meetings with ourmarketing and operations teams. The Risk Department hasthe authority to make temporary increases or changes to risklimits but such increases or changes must at all times remainwithin our overall risk management guidelines and frameworkof the Group.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201029RiskManagementWhere the execution of any activity will result in thebreach of any applicable limits in our risk managementguidelines and framework, specifi c approval for thatactivity must be sought, and obtained, from the ExecutiveRisk Management Team prior to the execution of theactivity. Any risk-related issues which are outside our riskmanagement guidelines and framework are reported tothe committee consisting of our Executive Directors, DrCheo Tong Choon @ Lee Tong Choon, Ms Michelle Cheoand Ms Bianca Cheo (the “Executive Risk ManagementTeam”).Setting of risk limitsThe Executive Risk Management Team establishes andreviews periodically our overall risk tolerance thresholds.The team is responsible for overall systems, proceduresand processes for risk management including derivativestrading. Such risk tolerance threshold is based on apercentage of total shareholders’ funds, and/or thebudgeted annual operating profi t, after taking into account,among other things, the Executive Risk ManagementTeam’s view on the overall production capacity of refi ningand processing operations and of the market upon whichtrading activities take place, the price (and price trend)of raw materials, the track record of management inmanaging its risk exposures in the prior period, and thefi nancial budgets including projected sales volumes andturnover.The risk tolerance threshold is also based on thecounterparty’s background, fi nancial performance andmanagement team. The risk tolerance threshold refers tothe maximum potential loss if all trading and operationsacross all products and geographical regions materialiseat the same time.Reporting and reviewing structureOur Risk Department is responsible for the capture andmeasurement of Group-wide risk and ensuring compliancewith our risk management systems, procedures andprocesses. The Risk Department analyses and reviews ourdaily risk exposure with oversight from the Executive RiskManagement Team. Any changes to our risk managementsystems, standards, practices, policies and risk appetiterequire the approval of our Board.With respect to risks related to the use of derivativefi nancial instruments, once limits for derivatives positionshave been established by our Executive Risk ManagementTeam, our Risk Department monitors our trading activitiesto ensure compliance with these limits. If additionalexposure is required, the trading department approachesthe Risk Department to approve an increase in the limits.On a case-by-case basis, the Risk Department makes arecommendation to the Executive Risk Management Teamto change established limits. If approved by the ExecutiveRisk Management Team, the revised limit is implementedand monitored by the Risk Department.Any breach (whether of trading limits or non-adherenceto established policies), disclosed or revealed by the RiskDepartment, will be acted upon by the Executive RiskManagement Team. Where the Executive Risk ManagementTeam considers the breach to be signifi cant (whether interms of fi nancial impact or otherwise), the Executive RiskManagement Team will report the breach to the Board.Our Internal Audit Department reviews our internal controlsystems regularly on an annual basis to ensure compliancewith the risk management system. Any material fi ndingssuch as breaches of trading limits or non-adherence toestablished risk management policies will be reported toour Audit Committee as and when they arise.

30MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Researchand DevelopmentWe are committed to develop new products and applicationsand have a modern, world class research and developmentcentre. The main objectives of our research and developmentinitiatives are to develop new products, to ensure ourproducts are suitable for their intended applications, and todevelop and improve on the quality of our products such astheir texture, appearance and overall sensory and aestheticaspects. Some of the new products that we are currentlyundertaking research and development work include cocoabutter equivalents and new products to add to our existingrange of bakery and specialty fats.Our innovation and knowledge centre is equipped withmodern and advanced machines and equipment whichenhance our research and development capabilities. Inaddition to the test equipment used for quality controlassessments, our laboratory runs tests on differentialscanning calorimetry and other sophisticated chemicalphysicaltests for our research and development activities.Our laboratory is equipped with a scaled-down refi ning plantthat includes scaled-down refi ning equipment, a texturiserand an interesterifi cation facility. We also have a scaled downchocolate making machine in the laboratory. To test newideas and ensure solutions provided to customers meet theirintended purposes, products are tested in our laboratorywhich also has cooking, steaming, frying and baking facilities.Panelists who are familiar with the products and possess theability to distinguish between basic tastes are invited to ratethe quality of developed products in specially set-up sensoryevaluation booths in our laboratory.Our research and development model is based on a globalorganisation that emphasises a collaborative approachto develop new products and related applications. Ourresearch and development team works closely with variousbusiness and marketing groups within the Group to keep ourinitiatives relevant and commercially viable.We believe that our research and development initiatives willbe able to enhance our competitiveness and keep us at theforefront of emerging developments and technologies in theindustry.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201031CorporateSocial ResponsibilityAt Mewah Group, we believe that corporate success andsocial welfare are interdependent and as such we believe inCreating Share Value, or CSV. We strive to create value forour shareholders by embracing responsibility for our activitieson the environment, consumers, employees, suppliers,competition and communities we operate in. As a sociallyresponsible corporate, we strive to honour the triple bottomline: People, Planet and Profi t.Our Corporate Social Responsibility Policy or CSR Policy canbe divided into four broader categories:1. Ethical business conduct2. Fair employment practices3. Workplace Health and Safety4. EnvironmentEthical Business ConductWe value the principles of integrity, honesty and accountability.We are committed to conducting our business while ensuring:• Ethical business practices throughout our operations• Fair treatment of all our employees, our suppliers, buyers,service providers and all other parties that deal with usduring our business operations• High standards for all matters relating to health, safety andthe environment• Transparent business policies and practicesWe recognise that the involvement of our employees is thekey to our success in the business. We treat our employeesfairly and expect them in turn to treat all stakeholders ethically.Fair employment practicesWe believe in providing equal employment opportunities andfollow fair employment practices.Our aim is to ensure that no job applicant shall receive lessfavourable treatment on account of sex, marital status,religion, race or nationality.The Group recognises the value of its employees and longterm retention as key to the success of the business. TheGroup aims to attract and retain skilled employees givingthem job security.Workplace Health and SafetyThe Group aims to provide each employee with a safe placeto work. All group locations are required to abide by localhealth and safety regulations. We conduct regular work riskassessments, seriously taking action to address any identifi edrisks by setting up protective guarding, enforcing the usageof personal protective equipment, embarking on work sitesaudits and inspections, as well as regular reviews and controlsof safety risks. We strive to achieve zero loss work day due towork place accidents.Mewaholeo Industries Sdn Bhd is the fi rst company underthe Mewah Group to be certifi ed with OSHAS 18000 in 2009.We have adopted OSHAS guidelines and best practices inour other subsidiaries companies. Benchmarking is also oneof the adopted strategies to ensure we are on par with theindustry’s standard. We are committed to designing benefi cialhealth and safety programs for the welfare of employees.

32MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010CorporateSocial ResponsibilityEnvironmentEnvironment protection is always part of our business. Westrive to preserve and protect our mother nature. We deeplyappreciate the importance of protecting the environmentespecially for future generation.As an active member of the Roundtable on Sustainable PalmOil (RSPO), we align our value with the principal objective of theRSPO, that is to promote the growth and use of sustainablepalm oil through co-operation within the supply chain andopen dialogue between its stakeholders. We seek to producepalm oil products in a sustainable manner.It is vital that the production and the use of palm oil must bedone in a sustainable manner based upon economical, socialand environmental viability to maintain ecological balance andbiodiversity vastness.We are actively involved in the development of ‘RSPO SupplyChain Certifi cation Requirements’. We remain fully committedto support sustainable palm oil by:a) Developing and maintaining an effective and effi cienttraceability systemA traceability system is vital in tracing and capturingthe use of sustainable palm oil throughout the supplychain. We can specifi cally trace from end products toraw material suppliers for each product where data onraw materials, plant utilities, in-process parameters,storage tank parameters and fi nished products are wellmaintainedand kept using ERP system. With the effectiveand effi cient traceability system, the volume / ratio of thesustainable palm oil used can be clearly identifi ed anddeclared accordingly to any claim requirements.b) Incorporating sustainability criteria as one of theprocurement requirementSourcing from sustainable suppliers is one of our majorrequirements in procuring raw materials. We are inpartnerships with sustainable suppliers who share thesame value and aim to preserve the environment for futuregenerations.Our various companies have been granted interim approval forMass Balance Supply Chain, based on our self-assessment,of compliance with RSPO Supply Chain Certifi cationrequirements for supply of RSPO certifi ed sustainable palmoil.CompanyDate of interim approvalMewah-Oils Sdn Bhd 1 st Jun, 2009Mewaholeo Industries Sdn Bhd 8 th Sep, 2009MOI Foods Malaysia Sdn Bhd 8 th Sep, 2009Ngo Chew Hong Oils & Fats (M) Sdn Bhd 15 th Oct, 2009Our various companies have also been granted interimapproval for segregation supply chain, based on our selfassessment,of compliance with RSPO Supply ChainCertifi cation requirements for supply of RSPO certifi edsustainable palm oil.CompanyDate of interim approvalMewah-Oils Sdn Bhd 26 th Nov, 2009Mewaholeo Industries Sdn Bhd 6 th Jan, 2010

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201033CorporateGovernanceMewah got listed on the Mainboard of the Singapore StockExchange Securities Trading Limited (SGX-ST) on November24, 2010. As a public listed Company, Mewah is committedto maintain a high standard of corporate governance on theprinciples of effective leadership, accountability, integrity andopenness as set out by the Corporate Governance Code 2005(“Code”). On October 29, 2010, a professional board was setup with a well balanced mix of executive and non-executiveindependent directors. The Board is pleased to confi rm that theCompany has adhered to the principles and guidelines of theCode, as have been referred below:GuidelineDisclosurePage ofreference in thisreport1.3 Delegation of authority, by the Board to any Board Committee, to make decisions on certain 34board matters1.4 The number of board and board committee meetings held in the year, as well as the attendance 34of every board member at these meetings1.5 The type of material transactions that require board approval under internal guidelines 342.2 Where the company considers a director to be independent in spite of the existence of a 34relationship as stated in the Code that would otherwise deem him as non-independent, the natureof the director’s relationship and the reason for considering him as independent3.1 Relationship between the Chairman and CEO where they are related to each other 354.1 Composition of nominating committee 344.5 Process for the selection and appointment of new directors to the board 364.6 Key information regarding directors, which directors are executive, non-executive or considered 35by the nominating committee to be independent5.1 Process for assessing the effectiveness of the Board as a whole and the contribution of each 36individual director to the effectiveness of the Board9 The clear disclosure of remuneration policy, level and mix of remuneration, procedure for 37setting remuneration and link between remuneration paid to directors and key executives, andperformance9.1 Composition of remuneration committee 349.2 Names and remuneration of each director. The disclosure of remuneration to be in bands of 38S$250,000. Breakdown (in percentage terms) of each director’s remuneration earned throughbase/fi xed salary, variable or performance-related income/bonuses, benefi ts in kind, and stockoptions granted and other long-term incentivesNames and remuneration of at least the top 5 key executives (who are not also directors). Thedisclosure to be in bands of S$250,000 including a breakdown of remuneration9.3 Remuneration of employees who are immediate family members of a director or the CEO, and 38whose remuneration exceeds S$150,000 during the year. The disclosure in bands of $250,000and including a breakdown of remuneration9.4 Details of employee share schemes 3811.8 Composition of audit committee and details of the committee’s activities 3912.2 Adequacy of internal controls, including fi nancial, operational and compliance controls, and riskmanagement systems40

34MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010CorporateGovernanceKey aspects of the Corporate Governance practices adopted bythe Company are described below:Principle 1The Board’s conduct of affairsEffective Board to lead and control the companyMewah is led and controlled by an effective Board that worksclosely with the Management for the success of the company. Inline with the guidelines set by the Code, key roles of the Boardare to:• provide entrepreneurial leadership, set strategic aims, andensure that the necessary fi nancial and human resources arein place for the company to meet its objectives;• establish a framework of prudent and effective controls whichenable risk to be assessed and managed;• review management performance; and• set the company’s values and standards, and ensure thatobligations to shareholders and others are understood andmet.In addition, the Board is also responsible for the review andapproval of Group’s business strategies, key investments andfi nancing decisions.The Board plans to convene scheduled meetings on a quarterlybasis to coincide with the announcement of the Group’s quarterlyresults. Ad-hoc meetings are to be convened as and whennecessary to review the Group’s performance, and to deliberateon specifi c issues. To facilitate the Board’s decision-makingprocess, the Company’s Articles of Association provides forDirectors to participate in Board meetings by teleconference orvideo conference. Decisions of the Board and Board committeesmay also be obtained via circulation.To assist the Board in the execution of its duties, the Board hasdelegated specifi c functions to following board committees:Audit CommitteeThe Audit Committee comprises independent directorsMr Lim How Teck, Tan Sri Dato’ Ir Muhammad Radzi Bin HajiMansor and Mr Giam Chin Toon. The Chairman of the AuditCommittee is Mr Lim How Teck. The Audit Committee is requiredto meet periodically to perform the functions as set out in Principle11 of this report.Nominating CommitteeOur Nominating Committee comprises Independent DirectorsMr Giam Chin Toon, Tan Sri Datuk Dr Ong Soon Hock, Tan SriDato’ Ir Muhammad Radzi Bin Haji Mansor, Mr Lim How Teck,and Executive Director Dr Cheo Tong Choon @ Lee Tong Choon.The Chairman of the Nominating Committee is Mr Giam ChinToon. Our Nominating Committee is responsible for the functionsas set out in Principle 4 of this report.Remuneration CommitteeOur Remuneration Committee comprises of IndependentDirectors Mr Giam Chin Toon, Tan Sri Dato’ Ir MuhammadRadzi Bin Haji Mansor and Mr Lim How Teck. The Chairmanof the Remuneration Committee is Mr Giam Chin Toon. OurRemuneration Committee is responsible for the functions as setout in Principle 7 of this report.No Board or board committee meetings were held in the yearas the Company was listed on November 24, 2010. The fi rstmeetings of the Board and the committees were held on February21, 2011 to coincide with the announcement of Group full yearresults.Principle 2Board Composition and GuidanceStrong and independent element on the BoardThe Board presently has ten members comprising six ExecutiveDirectors and four Non-Executive Directors. Out of the totalof ten Directors, four (representing one third of the Boardcomposition) of these Directors are considered “Independent”based on the guidelines under the Code. According to theCode, an independent director is one who has no relationship

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201035CorporateGovernancewith the Company, its related companies or its offi cers thatcould interfere, or be reasonably perceived to interfere withthe exercise of the director’s independent business judgment.The independence of each director is reviewed annually by theNominating Committee (NC).The composition and the effectiveness of the Board arereviewed on an annual basis by the NC to ensure that there isan appropriate mix of expertise and experience to fulfi ll its duties.The Board collectively views that its current size complies with theCode and is effective, taking into account the scale and natureof the operations of the Group. A brief profi le of each Director isgiven on pages 13 to 16 of this annual report.The nature of the current Directors’ appointments on the Boardand details of their membership on Board Committees are setout below:NameDr Cheo Tong Choon @Lee Tong ChoonMs Michelle Cheo Hui NingMs Bianca Cheo Hui HsinMr Cheo Seng JinMs Leong Choi FoongMs Wong Lai WanBoard MembershipChairman and Executuve DirectorChief Executive Offi cer andExecutive DirectorChief Operating Offi cer andExecutive DirectorHead, Commercial and ExecutiveDirectorGroup Treasurer and ExecutiveDirectorHead, Risk Management andExecutive DirectorAuditCommitteeNominatingCommitteeMemberRemunerationCommitteeMr Giam Chin Toon Lead Independent Director Member Chairman ChairmanTan Sri Dato’ Ir Muhammad Independent Director Member Member MemberRadzi Bin Haji MansorTan Sri Datuk Dr OngIndependent DirectorMemberSoon HockMr Lim How Teck Independent Director Chairman Member MemberPrinciple 3Chairman and Chief Executive OfficerSeparate Chairman and Chief Executive Offi cerDr Cheo Tong Choon @ Lee Tong Choon is our Chairman andExecutive Director and is responsible for the overall strategy anddirection for the Group. Ms Michelle Cheo Hui Ning is an ExecutiveDirector and our Chief Executive Offi cer and is the daughter ofthe Chairman. Along with the Chairman, she is responsible formanaging the overall strategic direction of the Group, whichinvolves managing the operations, projects and organisation ofthe Group.The Chairman has been the force behind the success of theGroup and works closely with the Chief Executive Offi cer toensure smooth transition of leadership and to ensure adequateaccountability and transparency.

36MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010CorporateGovernanceThe Non-executive, Independent Directors fulfi ll a pivotal role toensure a balance of power and authority, such that no one individualrepresents a considerable concentration of power. Their role isparticularly important as they provide unbiased and independentviews, advice and judgment to take care of the interests, not onlyof the Company but also of shareholders, employees, customers,suppliers and the many communities in which the Companyconducts business.This year, the Board at the recommendation of the Code,appointed a Lead Independent Director as part of the Boardsuccession planning in order to provide continuity of leadershipat the Board level in the absence of the Chairman. The LeadIndependent Director also acts as a bridge between theIndependent Directors and the Chairman as well as representsshareholders’ interests.Principle 4Board MembershipFormal and transparent process for the appointment of newdirectors to the BoardThe principal functions of the NC are as follows:(i)reviewing and assessing candidates for directorships (includingexecutive directorships) before making recommendations toour Board for appointment of Directors;(ii) re-nomination of our Directors in accordance with our Articlesof Association, having regard to our Director’s contributionand performance;(iii) determining annually whether or not a Director is independent;and(iv) deciding whether or not a Director is able to and has beenadequately carrying out his duties as a director.The Nominating Committee determines how our Board’sperformance is to be evaluated and proposes objectiveperformance criteria, subject to the approval of our Board, whichaddress how the Board has enhanced long-term shareholders’value. The Board has implemented a process to be carried outby the Nominating Committee for assessing the effectiveness ofthe Board as a whole and for assessing the contribution by eachindividual Director to the effectiveness of the Board. Each memberof the Nominating Committee is required to abstain from votingon any resolutions and making any recommendations and/orparticipating in any deliberations of the Nominating Committee inrespect of the assessment of his performance or re-nominationas director. In the event that any member of the NominatingCommittee has an interest in a matter being deliberated upon bythe Nominating Committee, he will abstain from participating in thereview and approval process relating to that matter.Board appointments are approved by way of written resolutionsbased on the recommendations of the NC.In accordance with the Company’s Articles of Association, eachdirector shall retire at least once every three years. A retiring shallbe eligible for re-election subject to approval by the shareholdersat the annual general meeting (AGM). New Directors will holdoffi ce only until the AGM following their appointments and theywill be eligible for re-election. Such Directors are not taken intoaccount in determining the number of Directors who are to retireby rotation.Principle 5Board PerformanceFormal assessment of the effectiveness of the BoardThe NC has in place a process for the evaluation of the Board’seffectiveness as a whole. The evaluation is done through writtenassessments by individual directors. In appraising the Board’seffectiveness, the assessment is based on factors includingthe Board’s understanding of the Group’s business operations,development of strategic directions and the effectiveness ofBoard meetings to facilitate discussion and decision on criticaland major corporate matters. The collated fi ndings are reportedand recommendations are submitted to the Board for review andfurther enhancement to the Board’s effectiveness.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201037CorporateGovernancePrinciple 6Access to InformationBoard members to have complete, adequate and timelyinformationAs a general rule, board papers are required to be sent to directorsat least three days before the board meeting so that the membersmay better understand the matters prior to the board meetingand discussion may be focused on questions that the directorsmay have. However, sensitive matters may be tabled at themeeting itself or discussed without any papers being distributed.The directors are also provided with the names and contactdetails of the Company’s senior management and the CompanySecretary to facilitate direct access to senior management andthe Company Secretary.The Company fully recognises that the fl ow of relevant informationon an accurate and timely basis is critical for the board to beeffective in the discharge of its duties. Management is thereforeexpected to provide the board with accurate information in a timelymanner concerning the Company’s progress or shortcomingsin meeting its strategic business objectives or fi nancial targetsand other information relevant to the strategic issues facing theCompany.The role of the Company Secretary is clearly defi ned and includesthe responsibility of ensuring that the board procedures arefollowed and that applicable rules and regulations are compliedwith.Subject to the approval of the Chairman, the directors, whetheras a Group or individually, may seek and obtain independentprofessional advice to assist them in their duties, at the expenseof the Company.Principle 7Procedures for Developing Remuneration PoliciesA formal and transparent procedure for developing policyOur Remuneration Committee is responsible for recommendingto our Board for a framework of remuneration for the Directorsand key executives, and determining specifi c remunerationpackages for each Director and the chief executive offi cer.The recommendations of our Remuneration Committee aresubmitted for endorsement by the entire Board. All aspectsof remuneration, including but not limited to directors’ fees,salaries, allowances, bonuses, options and benefi ts in kindare covered by our Remuneration Committee. Each memberof the Remuneration Committee is required to abstain fromvoting on any resolutions and making recommendations and/or participating in any deliberations of the RemunerationCommittee in respect of his own remuneration package.Principle 8Level and Mix of RemunerationAdequate Remuneration of DirectorsA competitive remuneration and reward system based onindividual performance is important in order to retain andincentivise the best talents. Remuneration and reward systemshould also be responsive to the economic climate as well as theperformance of the Group and its business units.Non-Executive Directors are paid Directors’ fees which comprisea basic fee and additional fees for appointments on other BoardCommittees. As an Executive Director, the CEO does not receiveDirectors’ fees but is remunerated as a member of Management.The RC has access to professional advice from appropriateconsultants to determine the level and mix of remuneration forDirectors as well as Management.Principle 9Disclosure on RemunerationClear disclosure of remuneration policy, level and mix ofremuneration, and procedure for setting remunerationThe breakdown of the remuneration of the Directors, top fi ve KeyExecutives and Employees who are immediate family membersof a director of the Company, for the fi nancial year ended 31December 2010 is as follows:

38MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010CorporateGovernanceNameFixedSalaryVariableIncomeBenefitsin kindTotalRemuneration BandExecutive DirectorsDr Cheo Tong Choon @ Lee Tong Choon 22% 77% 1% 100% S$3,250,000 toS$3,500,000Ms Michelle Cheo Hui Ning 49% 50% 1% 100% S$1,000,000 toS$1,250,000Ms Bianca Cheo Hui Hsin 49% 50% 1% 100% S$1,000,000 toS$1,250,000Mr Cheo Seng Jin 62% 37% 1% 100% S$1,000,000 toS$1,250,000Ms Leong Choi Foong 42% 55% 3% 100% S$250,000 toS$500,000Ms Wong Lai Wan 41% 57% 2% 100% S$250,000 toS$500,000Independent Non Executive DirectorsMr Giam Chin Toon 100% - - 100% S$250,000 and belowTan Sri Dato’ Ir Muhammad Radzi Bin Haji Mansor 100% - - 100% S$250,000 and belowTan Sri Datuk Dr Ong Soon Hock 100% - - 100% S$250,000 and belowMr Lim How Teck 100% - - 100% S$250,000 and belowTop 5 Key ExecutivesMr Shyam Kumbhat 18% 81% 1% 100% S$1,750,000 toS$2,000,000Mr Cheo Tiong Choon* 62% 37% 1% 100% S$1,000,000 toS$1,250,000Mr Rajesh Chopra 41% 59% - 100% S$500,000 toS$750,000Ms Agnes Lim Siew Choo 30% 69% 1% 100% S$250,000 toS$500,000Mr Sukumaran Ramasamy 88% 12% 0% 100% S$250,000 toS$500,000Employees who are immediate family members of a Director (remuneration exceeding S$150,000)Employee related to Dr Cheo Tong Choon @Lee Tong ChoonEmployee related to Dr Cheo Tong Choon @Lee Tong ChoonEmployee related to Dr Cheo Tong Choon @Lee Tong ChoonEmployee related to Dr Cheo Tong Choon @Lee Tong ChoonThere is currently no employee share scheme.* Related to Dr Cheo Tong Choon @ Lee Tong Choon63% 32% 5% 100% S$250,000 toS$500,00063% 32% 5% 100% S$250,000 toS$500,00063% 32% 5% 100% S$250,000 toS$500,00099% - 1% 100% S$250,000 and below

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201039CorporateGovernancePrinciple 10AccountabilityBalanced and understandable assessment of the Company’sperformance, position and prospectsThe board has embraced openness and transparency inthe conduct of the Company’s affairs, whilst preserving thecommercial interests of the Company. Financial reportsand other price-sensitive information are disseminated toshareholders through announcements via SGXnet to the SGX,press releases, the Company’s website, and public webcastand media and analyst briefi ngs.The Board will review and approve the results before its release.As recommended in the Guidebook for Audit Committees inSingapore, the Board will also review and approve any mediarelease of its fi nancial results. Since the SGX-ST’s introductionof the requirement for Directors to issue a Negative AssuranceStatement to accompany its quarterly fi nancial resultsannouncement, a process has been introduced to supportManagement’s representations to the Board on the integrity ofthe Group’s fi nancial statements and internal control systemsbefore the Negative Assurance Statement is given by theBoard.Principle 11Audit CommitteeEstablishment of Audit Committee with written terms ofreferenceThe Audit Committee (“AC”) comprises entirely non-executiveand independent directors, namely Mr Lim How Teck, Tan SriDato’ Ir Muhammad Radzi Bin Haji Mansor and Mr Giam ChinToon. The Committee shall meet at least four times during ayear and its terms of reference are to:(i)commissioning internal investigations and reviewingany signifi cant fi ndings and otherwise carrying outits obligations under Rule 719 of the SGX-ST ListingManual (for example, in relation to any suspected fraudor irregularity or suspected infringement of any Singaporelaws or regulations or rules of the SGX-ST or any otherregulatory authority of Singapore, which has or is likelyto have a material impact on the Company’s operatingresults or fi nancial position);(ii) assisting our Board in the discharge of its responsibilitieson fi nancial and accounting matters;(iii) recommending the appointment and dismissal of internalauditors and reviewing the audit plans, scope of work andresults of our audits compiled by our internal and externalauditors;(iv) reviewing the co-operation given by our offi cers to theexternal auditors;(v) nominating external auditors for re-appointment;(vi) reviewing the integrity of any fi nancial informationpresented to our Shareholders;(vii) reviewing interested person transactions and potentialconfl icts of interest, if any;(viii) reviewing all hedging policies and instruments to beimplemented by us, if any;(ix) reviewing all investment instruments that are not principalprotected;(x) reviewing and evaluating our administrative, operating andinternal accounting controls and procedures; and(xi) reviewing our risk management structure and anyoversight of our risk management processes andactivities to mitigate and manage risk at acceptable levelsdetermined by our Board.Apart from the duties listed above, the Audit Committee isrequired to commission and review the fi ndings of internalinvestigations into matters where there is any suspected fraudor irregularity, or failure of internal controls or infringementof any law, rule or regulation which has or is likely to have amaterial impact on our results of operations and/or fi nancialposition. Each member of the Audit Committee must abstainfrom voting on any resolution in respect of matters in which heis interested.The Audit Committee is satisfi ed with the independence andobjectivity of the external auditor and recommends to the Boardthe nomination of the external auditor for reappointment. TheAudit Committee has conducted an annual review of all nonauditservices provided by the external auditor and is satisfi edthat the nature and extent of such services do not affect theindependence of the external auditor.

40MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010CorporateGovernancePrinciple 12 and 13Internal Control and AuditSound system of internal control and independent audit functionThe Board is of the view that the Group has adequate internalcontrols. The Company’s internal and external auditors conductan annual review of the effectiveness of the Company’s materialinternal controls, including fi nancial, operational and compliancecontrols, and risk management. Any material non-complianceor failures in internal controls and recommendations forimprovements are reported to the Audit Committee. The AuditCommittee also reviews the effectiveness of the actions taken bymanagement on the recommendations made by the internal andexternal auditors in this respect.The role of the internal auditors is to assist the Audit Committeeto ensure that the Company maintains a sound system of internalcontrols by regular monitoring of key controls and proceduresand ensuring their effectiveness, undertaking investigations asdirected by the Audit Committee, and conducting regular indepthaudits of high risk areas. The Company’s internal auditfunctions are serviced in-house (“Group Internal Audit”).Staffed by suitably qualifi ed executives, Group Internal Audit hasunrestricted direct access to the Audit Committee. The Head ofGroup Internal Audit’s primary line of reporting is to the Chairmanof the Audit Committee, although he reports administratively to theChief Executive Offi cer of the Company.Group Internal Audit is guided by the standards for the professionalpractice of internal auditing developed by the Institute of InternalAudit and has met the standards for the professional practice ofInternal Auditing promulgated by the Institute of Internal Audit.During the year, Group Internal Audit adopted a risk-basedauditing approach that focuses on material internal controls,including fi nancial, operational and compliance controls.Audits were carried out on all signifi cant business units in theCompany, inclusive of limited review performed on dormantand inactive companies. All Group Internal Audit’s reports aresubmitted to the Audit Committee for deliberation with copies ofthese reports extended to the Chairman, Chief Executive Offi cerand the relevant senior management offi cers. In addition, GroupInternal Audit’s summary of fi ndings and recommendations arediscussed at the Audit Committee meetings.Principle 14 and 15Communication with ShareholdersRegular, effective and fair communication with shareholders;Greater shareholder participation at Annual General MeetingsThe Group is committed to upholding high standard ofdisclosure and continues to keep all stakeholders informedof its corporate activities on a timely and consistent basis.The company disseminates all price sensitive and materialinformation to its shareholders via SGXNET on a non-selectivebasis. Financial and other performance data is given for theGroup as well as business units where appropriate, to giveshareholders a better insight into the Group’s performance. Thedate of the release of quarterly results is disclosed at least twoweeks prior to the date of announcement through SGXNET. Onthe day of announcement, the fi nancial statements as well asthe accompanying press release and presentation slides arereleased onto the SGX-ST website as well as on the companywebsite at www.mewahgroup.com. Thereafter, a briefi ng orteleconference by management is jointly held for media andanalysts.All shareholders of the Company whose names are registeredin the Depository Register and the Register of Members areentitled to attend the general meetings of the Company.Shareholders are informed of shareholders’ meetings throughnotices published in the newspapers and reports or circularssent to all shareholders. They are encouraged to meet with theBoard and Senior Management so as to have a greater insightinto the Group’s developments. If any shareholder is unable toattend, he is allowed to appoint up to two proxies to vote onhis behalf at the meeting through proxy forms sent in advance.At shareholders’ meetings, each distinct issue is proposed as aseparate resolution.The Chairmen of each board committee and managementare required to be present to address questions at the AnnualGeneral Meeting. External auditors are also present at suchmeetings to assist the directors to address shareholders’queries, if necessary. Minutes of shareholder meetings areavailable upon request by registered shareholders.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201041CorporateGovernanceDealings in SecuritiesThe Group has adopted a Best Practice Code – Trading inCompany’s Securities. Directors and key senior executives ofthe Group are prohibited from dealing in the Company’s sharestwo weeks before the announcement of Group’s fi rst quarter,second quarter and third quarter results and one month beforethe announcement of full year results, and up to a day afterthe date of the announcement of the results. Additionally, alldirectors of the Group and employees are reminded not to tradein situations where the insider trading laws and rules wouldprohibit trading.The directors’ interests in shares of the Company during the yearare found on pages 43 to 44 of this Report.Interested Person TransactionsThe Company has established procedures to ensure that alltransactions with interested persons are reported on a timelymanner to the AC and that the transactions are carried out on anormal commercial terms and will not be prejudicial to the interestsof the Company and its minority shareholders. The Company’sdisclosure in respect of interested person transactions for thefi nancial year ended 31 December 2010 are as follows:Name of Interested PersonAggregate value of all IPT duringthe year under review (excludingtransactions less than SGD100,000and transactions conducted undershareholders’ mandate pursuant toRule 920)Aggregate value of all IPT conductedunder shareholders’ mandatepursuant to Rule 920 (excludingtransactions less than SGD100,000)FY 2010 FY 2010US$’000US$’000Prelude Gateway Sdn. Bhd. Nil 1,797Anthola Insurance Agencies Sdn. Bhd. Nil 3,195Perfect Venue Sdn. Bhd. Nil 56Ecolex Sdn. Bhd. Nil 55,310Capital Paradise Sdn. Bhd. Nil 56Containers Printers Pte Ltd Nil 9,967Choon Heng Transport & Warehousing Pte Ltd Nil 577Nature International Pte Ltd Nil 12,297Above transactions are conducted in accordance to the Company’s Shareholders Mandate as indicated in the Prospectus dated16 th November, 2010.Statement by Audit Committee and Board of DirectorsIn accordance with Rule 716 of the Listing Manual, the Audit Committee and the Board of Directors of the Company have satisfi edthemselves that the appointment of different auditors for certain of its overseas subsidiaries as disclosed on page 123, would notcompromise the standard and effectiveness of the audit of the Group.

ContentsDirectors’ ReportStatement by DirectorsIndependent Auditor’s ReportConsolidated Income StatementConsolidated Statement of Comprehensive IncomeBalance Sheet - GroupBalance Sheet - CompanyConsolidated Statement of Changes In EquityConsolidated Statement of Cash FlowsNotes To The Financial Statements43474849505152535556

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201043Directors’ ReportFor the fi nancial year ended 31 December 2010The directors present their report to the members together with the audited consolidated fi nancial statements of the Group forthe fi nancial year ended 31 December 2010 and the balance sheet of the Company as at 31 December 2010.DirectorsThe directors of the Company in offi ce at the date of this report are as follows:Dr Cheo Tong Choon @ Lee Tong Choon (appointed on 29 October 2010)Ms Michelle Cheo Hui Ning (appointed on 29 October 2010)Ms Bianca Cheo Hui Hsin (appointed on 29 October 2010)Mr Cheo Seng Jin (appointed on 29 October 2010)Ms Leong Choi Foong (appointed on 29 October 2010)Ms Wong Lai Wan (appointed on 29 October 2010)Mr Giam Chin Toon (appointed on 29 October 2010)Tan Sri Dato’ Ir. Muhammad Radzi Bin Haji Mansor (appointed on 29 October 2010)Mr Lim How Teck (appointed on 29 October 2010)Tan Sri Datuk Dr Ong Soon Hock (appointed on 29 October 2010)Arrangements to enable directors to acquire shares and debenturesNeither at the end of nor at any time during the fi nancial year was the Company a party to any arrangement whose object was toenable the directors of the Company to acquire benefi ts by means of the acquisition of shares in, or debentures of, the Companyor any other body corporate.Directors’ interests in shares or debentures(a)According to the register of directors’ shareholdings, none of the directors holding offi ce at the end of the fi nancial year hadany interest in the shares or debentures of the Company or its related corporations, except as follows:Holdings registeredin name ofdirector or nomineeAt31.12.2010At1.1.2010or date ofappointment,if laterAt31.12.2010Holdings in whichdirector is deemedto have an interestAt1.1.2010or date ofappointment,if laterDr Cheo Tong Choon @ Lee Tong Choon 8,871,000 - 527,041,220 527,041,220Ms Michelle Cheo Hui Ning - - 527,041,220 527,041,220Ms Bianca Cheo Hui Hsin - - 527,041,220 527,041,220

44MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Directors’ ReportFor the fi nancial year ended 31 December 2010Directors’ interests in shares or debentures (continued)(a)continuedHoldings registeredin name ofdirector or nomineeAt31.12.2010At1.1.2010or date ofappointment,if laterAt31.12.2010Holdings in whichdirector is deemedto have an interestAt1.1.2010or date ofappointment,if laterMr Cheo Seng Jin 123,950,000 122,000,000 - -Ms Leong Choi Foong 94,000 - - -Ms Wong Lai Wan 224,000 - - -Mr Giam Chin Toon 100,000 - - -Tan Sri Dato’ Ir. Muhammad Radzi BinHaji Mansor 20,000 - - -Mr Lim How Teck 150,000 - - -Tan Sri Datuk Dr Ong Soon Hock 10,000 - - -(b)The directors’ interests in the ordinary shares of the Company as at 21 January 2011 were the same as those as at31 December 2010.Directors’ contractual benefitsSince the end of the previous fi nancial year, no director has received or become entitled to receive a benefi t by reason of acontract made by the Company or a related corporation with the director or with a fi rm of which he is a member or with acompany in which he has a substantial fi nancial interest, except as disclosed in the accompanying fi nancial statements and inthis report.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201045Directors’ ReportFor the fi nancial year ended 31 December 2010Audit CommitteeThe members of the Audit Committee at the end of the fi nancial year were as follows:Mr Lim How Teck (Chairman)Tan Sri Dato’ Ir. Muhammad Radzi Bin Haji MansorMr Giam Chin ToonAll members of the Audit Committee are non-executive directors.The Audit Committee is required to meet periodically to perform the following functions:(i) commissioning internal investigations and reviewing any signifi cant fi ndings and otherwise carrying out its obligations underRule 719 of the Singapore Exchange Securities Trading Limited (“SGX-ST”) Listing Manual (for example, in relation to anysuspected fraud or irregularity or suspected infringement of any Singapore laws or regulations or rules of the SGX-ST orany other regulatory authority of Singapore, which has or is likely to have a material impact on the Company’s operatingresults or fi nancial position);(ii) assisting our Board in the discharge of its responsibilities on fi nancial and accounting matters;(iii) recommending the appointment and dismissal of internal auditors and reviewing the audit plans, scope of work and resultsof our audits compiled by our internal and external auditors;(iv) reviewing the co-operation given by our offi cers to the external auditors;(v) nominating external auditors for re-appointment;(vi) reviewing the integrity of any fi nancial information presented to our Shareholders;(vii) reviewing interested person transactions and potential confl icts of interest, if any;(viii) reviewing all hedging policies and instruments to be implemented by us, if any;(ix) reviewing all investment instruments that are not principal protected;(x)(xi)reviewing and evaluating our administrative, operating and internal accounting controls and procedures; andreviewing our risk management structure and any oversight of our risk management processes and activities to mitigateand manage risk at acceptable levels determined by our Board.Apart from the duties listed above, the Audit Committee is required to commission and review the fi ndings of internal investigationsinto matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any law, rule orregulation which has or is likely to have a material impact on our results of operations and/or fi nancial position. Each member ofthe Audit Committee must abstain from voting on any resolution in respect of matters in which he is interested.The Audit Committee has recommended to the Board that the independent auditor, PricewaterhouseCoopers LLP, be nominatedfor re-appointment at the forthcoming Annual General Meeting of the Company.

46MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Directors’ ReportFor the fi nancial year ended 31 December 2010Independent auditorThe independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.On behalf of the directorsDr Cheo Tong Choon @ Lee Tong ChoonDirectorMs Michelle Cheo Hui NingDirector22 March 2011

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201047Statement By DirectorsFor the fi nancial year ended 31 December 2010In the opinion of the directors,(a) the balance sheet of the Company and the consolidated fi nancial statements of the Group as set out on pages 49 to 123are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December2010, and of the results of the business, changes in equity and cash fl ows of the Group for the fi nancial year then ended;and(b)at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as andwhen they fall due.On behalf of the directorsDr Cheo Tong Choon @ Lee Tong ChoonDirectorMs Michelle Cheo Hui NingDirector22 March 2011

48MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Independent Auditor’s ReportINDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MEWAH INTERNATIONAL INC.(formerly known as Moi International Holdings Inc.)Report on the Financial StatementsWe have audited the accompanying fi nancial statements of Mewah International Inc. (the “Company”) and its subsidiaries (the“Group”) set out on pages 49 to 123, which comprise the consolidated balance sheet of the Group and the balance sheet of theCompany as at 31 December 2010, the consolidated income statement, the consolidated statement of comprehensive income,the consolidated statement of changes in equity and the consolidated statement of cash fl ows of the Group for the fi nancial yearthen ended, and a summary of signifi cant accounting policies and other explanatory information.Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation of the fi nancial statements that give a true and fair view in accordance withSingapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting control suffi cient toprovide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition that transactionsare properly authorised and that they are recorded as necessary to permit the preparation of true and fair consolidated incomestatement and balance sheets and to maintain accountability of assets.Auditor’s ResponsibilityOur responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordancewith Singapore Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements.The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement ofthe fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controlsrelevant to the entity’s preparation of fi nancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’sinternal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of the fi nancial statements.We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion, the consolidated fi nancial statements of the Group and the balance sheet of the Company are properly drawn upin accordance with Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Groupand of the Company as at 31 December 2010, and the results, changes in equity and cash fl ows of the Group for the fi nancialyear ended on that date.PricewaterhouseCoopers LLPPublic Accountants and Certifi ed Public AccountantsSingapore, 22 March 2011

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201049Consolidated Income StatementFor the fi nancial year ended 31 December 2010Note 2010 2009US$’000US$’000Revenue 4 3,533,071 2,867,081Cost of sales 5 (3,272,973) (2,617,702)Gross profi t 260,098 249,379Other income 6 5,161 4,175Expenses- Selling and distribution expenses (89,906) (73,299)- Administrative expenses (57,302) (54,234)- Other operating gains/(expenses) 7 5,150 (2,576)- Finance costs 8 (9,779) (6,321)- Placing and listing expenses 25(f) (4,737) -Share of profi t of associate 3 -Profi t before tax 10 108,688 117,124Income tax expense 11 (16,248) (27,449)Profit after tax 92,440 89,675Profit after tax attributable to:Equity holders of the Company 92,352 89,191Non-controlling interests 88 48492,440 89,675Earnings per share attributable to equity holders of the Company(expressed in US cents per share)- Basic and diluted 12 7.08 6.96The accompanying notes form an integral part of these fi nancial statements.

50MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Consolidated Statement OfComprehensive IncomeFor the fi nancial year ended 31 December 20102010 2009US$’000US$’000Profit after tax 92,440 89,675Other comprehensive income:Currency translation differences arising from foreign operations, net of tax 25,385 6,564Total comprehensive income 117,825 96,239Total comprehensive income attributable to:Equity holders of the Company 117,637 95,785Non-controlling interests 188 454117,825 96,239The accompanying notes form an integral part of these fi nancial statements.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201051Balance Sheet - GroupAs at 31 December 2010ASSETSNote 2010 2009US$’000US$’000Current assetsInventories 13 243,959 143,405Trade receivables 14 427,109 279,674Other receivables 15 26,699 29,710Tax recoverable 5,847 413Derivative fi nancial instruments 16(a) 87,040 41,253Cash and cash equivalents 17 215,322 37,6341,005,976 532,089Non-current assetsProperty, plant and equipment 18 217,933 173,349Investment in associate 19 86 -Intangible asset 20 5,205 -Derivative fi nancial instruments 16(b) 4,442 -227,666 173,349Total assets 1,233,642 705,438LIABILITIESCurrent liabilitiesTrade payables 21 252,785 135,464Other payables 22 49,895 67,240Tax payable 13,534 5,065Derivative fi nancial instruments 16(a) 66,674 13,624Borrowings 23 307,774 206,933690,662 428,326Non-current liabilitiesBorrowings 23 18,359 13,921Deferred tax liabilities 24 15,453 24,17833,812 38,099Total liabilities 724,474 466,425NET ASSETS 509,168 239,013EQUITYEquity attributable to equity holders:Share capital 25 1,507 11Share premium 25 185,416 -Retained profi ts 330,287 259,290Reserves 26 (9,506) (21,294)507,704 238,007Non-controlling interests 1,464 1,006Total equity 509,168 239,013The accompanying notes form an integral part of these fi nancial statements.

52MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Balance Sheet - CompanyAs at 31 December 2010ASSETSNote 2010 2009US$’000US$’000Current assetsOther receivables 15 61,890 26,259Cash and cash equivalents 17 142,863 -204,753 26,259Non-current assetsInvestment in subsidiaries 19 *- *-Total assets 204,753 26,259LIABILITIESCurrent liabilitiesOther payables 22 20,935 26,248Total liabilities 20,935 26,248NET ASSETS 183,818 11EQUITYEquity attributable to equity holders:Share capital 25 1,507 11Share premium 25 185,416 -(Accumulated losses)/Retained profi ts 29 (3,105) -Total equity 183,818 11*The nominal value of investment in subsidiaries is US$104.The accompanying notes form an integral part of these fi nancial statements.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201053Consolidated Statement Of Changes In EquityFor the fi nancial year ended 31 December 2010NoteSharecapitalSharepremiumAttributable to equity holders of the CompanyMergerreserveGeneralreserveAssetrevaluationreserveCurrencytranslationreserveRetainedprofits TotalNoncontrollinginterestsUS$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000Totalequity2010Beginning of thefinancial yearIssue of new shares toexisting shareholdersIssue of sharespursuant to the ListingPlacing and listingexpensesCash paid/payablearising from acquisitionof subsidiaries undercommon controlAcquisition of noncontrollinginterestsRealisation of reserveupon disposalAcquisition ofsubsidiariesDividendsTotal comprehensiveincome for the fi nancialyearEnd of the financialyear11 - (38,834) - 11,031 6,509 259,290 238,007 1,006 239,01325(d) 1,270 - - - - - - 1,270 - 1,27025(e) 226 191,055 - - - - - 191,281 - 191,28125(f) - (5,639) - - - - - (5,639) - (5,639)26(b)(i) - - (11,915) - - - - (11,915) - (11,915)26(b)(ii) - - - (832) - - - (832) (426) (1,258)26(b)(iii) - - - - (750) - 750 - - -34(b)(iii) - - - - - - - - 920 92030 - - - - - - (22,105) (22,105) (224) (22,329)- - - - - 25,285 92,352 117,637 188 117,8251,507 185,416 (50,749) (832) 10,281 31,794 330,287 507,704 1,464 509,168The accompanying notes form an integral part of these fi nancial statements.

54MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Consolidated Statement Of Changes In EquityFor the fi nancial year ended 31 December 2010NoteSharecapitalSharepremiumAttributable to equity holders of the CompanyMergerreserveGeneralreserveAssetrevaluationreserveCurrencytranslationreserveRetainedprofits TotalNoncontrollinginterestsUS$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000Totalequity2009Beginning of thefinancial yearTransfer to retainedearningsRealisation of reserveupon disposalDividendsTotal comprehensiveincome for the fi nancialyearEnd of the financialyear11 - (38,834) 2,835 11,139 (85) 220,752 195,818 552 196,37026(b)(ii) - - - (2,835) - - 2,835 - - -26(b)(iii) - - - - (108) - 108 - - -30 - - - - - - (53,596) (53,596) - (53,596)- - - - - 6,594 89,191 95,785 454 96,23911 - (38,834) - 11,031 6,509 259,290 238,007 1,006 239,013The accompanying notes form an integral part of these fi nancial statements.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201055Consolidated Statement of Cash FlowsFor the fi nancial year ended 31 December 2010Note 2010 2009US$’000US$’000Cash flows from operating activitiesTotal profi t 92,440 89,675Adjustments for:- Income tax expense 16,248 27,449- Depreciation 13,264 10,869- Loss on disposals of other property, plant and equipment 81 325- Other property, plant and equipment written off 977 1,463- Placing and listing expenses 25(f) 4,737 -- Interest income (4,148) (2,901)- Interest expense 9,779 6,321- Share of profi t of associate (3) -- Exchange differences (net) 7,209 3,257Operating cash flows before working capital changes 140,584 136,458Changes in operating assets and liabilities:- Inventories (76,634) (60,123)- Trade and other receivables (156,764) (20,444)- Trade and other payables 90,737 (52,426)- Derivative fi nancial instruments 2,822 58,697Cash flows generated from operations 745 62,162Interest received 3,834 2,772Interest paid (9,779) (6,321)Income tax paid (25,333) (36,750)Net cash flows (used in)/from operating activities (30,533) 21,863Cash flows from investing activitiesAcquisition of non-controlling interests (1,258) -Acquisition of subsidiaries 34(b)(ii) 3,604 -Investment in associate 19(a) (83) -Purchase of property, plant and equipment (40,552) (21,259)Proceeds from disposal of property, plant and equipment 706 6,774Net cash flows used in investing activities (37,583) (14,485)Cash flows from financing activitiesNet proceeds from placing and listing 25(e) 183,582 -Proceeds from issue of new shares to existing shareholders 1,270 -Repayment of shareholders loan (22,819) -Dividends paid 30(c) (24,085) (29,268)Restricted short term deposit (19) (2)Proceeds from/(Repayment to) related parties 1,301 (6,696)Proceeds from long term borrowings 9,905 1,691Repayment of long term borrowings (5,480) (7,031)Net proceeds from short term borrowings 99,555 32,575Interest received 314 129Net cash flows from/(used in) financing activities 243,524 (8,602)Net change in cash and cash equivalents 175,408 (1,224)Cash and cash equivalents at beginning of the fi nancial year 37,376 38,043Effect of changes in exchange rate on cash and cash equivalents 2,368 557Cash and cash equivalents at end of the financial year 17 215,152 37,376The accompanying notes form an integral part of these fi nancial statements.

56MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 2010These notes form an integral part of and should be read in conjunction with the accompanying fi nancial statements.1. General informationMewah International Inc. (the “Company”) is listed on the Singapore Exchange Securities Trading Limited and incorporatedand domiciled in the Cayman Islands. The address of its registered offi ce is Harbour Place, 2 nd Floor, 103 South ChurchStreet, P.O. Box 472, George Town, Grand Cayman, KY1-1106, Cayman Islands. The principal place of business of theCompany is at 5, International Business Park, #05-00, Mewah Building, Singapore 609914. With effect from 29 September2010, the name of the Company was changed from Moi International Holdings Inc. to Mewah International Inc..The principal activity of the Company is that of investment holding. The principal activities of its subsidiaries are disclosedin Note 38 of the fi nancial statements.2. Significant accounting policies2.1 Basis of preparationThese fi nancial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).The fi nancial statements have been prepared under the historical cost convention, except as disclosed in the accountingpolicies below.The preparation of fi nancial statements in conformity with FRS requires management to exercise its judgement in theprocess of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates andassumptions. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimatesare signifi cant to the fi nancial statements, are disclosed in Note 3.Interpretations and amendments to published standards effective in 2010On 1 January 2010, the Group adopted the new or amended FRS and Interpretations to FRS (“INT FRS”) that are mandatoryfor application from that date. Changes to the Group’s accounting policies have been made as required, in accordance withthe transitional provisions in the respective FRS and INT FRS.The adoption of these new or amended FRS and INT FRS did not result in substantial changes to the Group’s andCompany’s accounting policies and had no material effect on the amounts reported for the current or prior fi nancial yearsexcept as disclosed below:(a) FRS 103 (revised) Business Combinations (effective for annual periods beginning on or after 1 July 2009)Please refer to Note 2.3(a)(ii) for the revised accounting policy on business combinations which the Group has appliedfor its acquisition of Molly Foods bvba on 27 December 2010 (Note 34(b)).The changes have been implemented prospectively, no adjustments were necessary to any of the amounts previouslyrecognised in the fi nancial statements.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201057Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.2 Revenue recognitionRevenue for the Group represents the fair value of the consideration received or receivable from the gross infl ow ofeconomic benefi ts during the year arising from the course of the ordinary activities of the Group’s business. Revenueis represented net of goods and services tax, rebates and discounts, and after eliminating sales within the Group.The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probablethat the collectability of the related receivables is reasonably assured and when the specifi c criteria for each of theGroup’s activities are met as follows:(a)Sale of goodsRevenue from sale of goods is recognised when signifi cant risks and rewards of ownership are transferredto the buyer and there is neither continuing managerial involvement to the degree usually associated withownership nor effective control over the goods sold.(b)Interest incomeInterest income is recognised using the effective interest method.(c)Rental incomeRental income from operating leases (net of any incentives given to the lessees) is recognised on a straight-linebasis over the lease term.2.3 Group accounting(a)Subsidiaries(i)ConsolidationSubsidiaries are entities (including special purpose entities) over which the Group has power to governthe fi nancial and operating policies so as to obtain benefi ts from its activities, generally accompanied bya shareholding giving rise to a majority of the voting rights. The existence and effect of potential votingrights that are currently exercisable or convertible are considered when assessing whether the Groupcontrols another entity. Subsidiaries are consolidated from the date on which control is transferred to theGroup. They are de-consolidated from the date on which control ceases.In preparing the consolidated fi nancial statements, transactions, balances and unrealised gainson transactions between group entities are eliminated. Unrealised losses are also eliminated but areconsidered an impairment indicator of the asset transferred. Accounting policies of subsidiaries havebeen changed where necessary to ensure consistency with the policies adopted by the Group.Non-controlling interests are that part of the net results of operations and of net assets of a subsidiaryattributable to the interests which are not owned directly or indirectly by the equity holders of theCompany. They are shown separately in the consolidated income statement, consolidated statementof comprehensive income, consolidated statement of changes in equity and balance sheet. Totalcomprehensive income is attributed to the non-controlling interests based on their respective interests ina subsidiary, even if this results in the non-controlling interests having a defi cit balance.

58MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.3 Group accounting (continued)(a)Subsidiaries (continued)(ii)Acquisition of businessesThe acquisition method of accounting is used to account for business combinations by the Group,except for business combination under common control.For business combinations under acquisition method of accounting, the consideration transferred for theacquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and theequity interests issued by the Group. The consideration transferred also includes the fair value of any contingentconsideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.Acquisition-related costs are expensed as incurred.Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combinationare, with limited exceptions, measured initially at their fair values at the acquisition date.On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquireeat the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of theacquiree’s net identifi able assets.The excess of the consideration transferred, the amount of any non-controlling interest in the acquireeand the acquisition-date fair value of any previous equity interest in the acquiree over the fair value ofthe net identifi able assets acquired is recorded as goodwill. Please refer to Note 2.5 for the subsequentaccounting policy on goodwill.Acquisitions of entities under common control have been accounted for using the pooling-of-interestmethod. Under this method:• The fi nancial statements of the Group have been prepared as if the Group structure immediately afterthe transaction has been in existence since the earliest date the entities are under common control;• The assets and liabilities are brought into the fi nancial statements at their existing carrying amountsfrom the perspective of the controlling party;• The income statement includes the results of the acquired entities since the earliest date the entitiesare under common control;• The comparative fi gures of the Group represent the income statement, statement of comprehensiveincome, statement of cash fl ows and statement of changes in equity have been prepared as if thecombination had occurred from the date when the combining entities or businesses fi rst cameunder common control;• The cost of investment is recorded at the aggregate of the nominal value of the equity sharesissued, cash and cash equivalents and fair values of other consideration; and• On consolidation, the difference between the cost of investment and the nominal value of the sharecapital of the merged subsidiary is taken to merger reserve. Cash paid/payable arising from theacquisition under common control is also taken to the merger reserves.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201059Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.3 Group accounting (continued)(a)Subsidiaries (continued)(iii)Disposals of subsidiaries or businessesWhen a change in the Company’s ownership interest in a subsidiary results in a loss of control over thesubsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amountsrecognised in other comprehensive income in respect of that entity are also reclassifi ed to profi t or lossor transferred directly to retained earnings if required by a specifi c Standard.Any retained interest in the entity is remeasured at fair value. The difference between the carrying amountof the retained investment at the date when control is lost and its fair value is recognised in profi t orloss.Please refer to Note 2.6 for the accounting policy on investments in subsidiaries in the separate fi nancialstatements of the Company.(b)Transactions with non-controlling interestsChanges in the Company’s ownership interest in a subsidiary that do not result in a loss of control over thesubsidiary are accounted for as transactions with equity owners of the Group. Any difference between thechange in the carrying amounts of the non-controlling interest and the fair value of the consideration paid orreceived is recognised in general reserve within equity attributable to the equity holders of the Company.(c)AssociatesAssociates companies are entities over which the Group has signifi cant infl uence, but not control, generallyaccompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%.Investments in associates are accounted for in the consolidated fi nancial statements using the equity methodof accounting less impairment losses, if any.Investments in associates are initially recognised at cost. The cost of an acquisition is measured at the fairvalue of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange,plus costs directly attributable to the acquisition. Goodwill on associates represents the excess of the cost ofacquisition of the associate over the Group’s share of the fair value of the identifi able net assets of the associateand is included in the carrying amount of the investments.In applying the equity method of accounting, the Group’s share of its associates’ post-acquisition profi tsor losses are recognised in profi t or loss and its share of post-acquisition other comprehensive income isrecognised in other comprehensive income. These post-acquisition movements and distributions received fromthe associates are adjusted against the carrying amount of the investment. When the Group’s share of lossesin an associates equals or exceeds its interest in the associates, including any other unsecured non-currentreceivables, the Group does not recognise further losses, unless it has obligations or has made payments onbehalf of the associates.

60MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.3 Group accounting (continued)(c)Associates (continued)Unrealised gains on transactions between the Group and its associates are eliminated to the extent of theGroup’s interest in the associates. Unrealised losses are also eliminated unless the transaction providesevidence of an impairment of the asset transferred. The accounting policies of associates have been changedwhere necessary to ensure consistency with the accounting policies adopted by the Group.Gains and losses arising from partial disposals or dilutions in investments in associates are recognised in profi tor loss.Investments in associates are derecognised when the Group loses signifi cant infl uence. Any retained interest inthe entity is remeasured at its fair value. The difference between the carrying amount of the retained investmentat the date when signifi cant infl uence is lost and its fair value is recognised in profi t or loss.Please refer to Note 2.6 for the accounting policy on investments in associates in the separate fi nancialstatements of the Company.2.4 Property, plant and equipment(a)Measurement(i)Property, plant and equipmentAll property, plant and equipment are initially recognised at cost and subsequently carried at cost lessaccumulated depreciation and accumulated impairment losses.When an asset is revalued, any accumulated depreciation at the date of revaluation is eliminated againstthe gross carrying amount of the asset. The net amount is then restated to the revalued amount of theasset.Increase in carrying amount arising from revaluation, including currency translation differences, arerecognised in the asset revaluation reserve, unless they offset previous decreases in the carrying amountsof the same asset, in which case, they are recognised in profi t or loss. Decreases in carrying amounts thatoffset previous increases of the same asset are recognised against the asset revaluation reserve. All otherdecreases in carrying amounts are recognised as a loss in the statement of comprehensive income.The Group on 1 January 2007 has elected to adopt FRS 101 exemption to deem the previous revaluationof certain property, plant and equipment as deemed cost (Note 18 (c)).(ii)Components of costsThe cost of an item of property, plant and equipment initially recognised includes its purchase price andany cost that is directly attributable to bringing the asset to the location and condition necessary for it tobe capable of operating in the manner intended by management. Cost also includes borrowing costs thatare directly attributable to the acquisition, construction or production of a qualifying asset (refer to Note2.8 on borrowing costs).

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201061Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.4 Property, plant and equipment (continued)(b)DepreciationDepreciation on items of property, plant and equipment is calculated using the straight-line method to allocatetheir depreciable amounts over their estimated useful lives. The annual rates of depreciation are as follows:Leasehold land and buildingsAmortised over the period ofleases (30 to 99 years)Freehold buildings 2%Plant and equipment 5%Furniture, fi xtures and offi ce equipment 5% to 20%Motor vehicles 20%Freehold land and capital expenditure in progress are stated at cost and not depreciated.The residual values, estimated useful lives and depreciation method of property, plant and equipment arereviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are recognisedin profi t or loss when the changes arise.(c)ImpairmentProperty, plant and equipment are tested for impairment whenever there is any objective evidence or indicationthat these assets may be impaired.For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost tosell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cashinfl ows that are largely independent of those from other assets. If this is the case, the recoverable amount isdetermined for the cash-generating-units (“CGU”) to which the asset belongs.If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carryingamount of the asset (or CGU) is reduced to its recoverable amount.The difference between the carrying amount and recoverable amount is recognised as an impairment loss inprofi t or loss, unless the asset is carried at revalued amount, in which case, such impairment loss is treated asa revaluation decrease.An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in theestimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.The carrying amount of this asset is increased to its revised recoverable amount, provided that this amountdoes not exceed the carrying amount that would have been determined (net of any accumulated amortisationor depreciation) had no impairment loss been recognised for the asset in prior years.A reversal of impairment loss for an asset other than goodwill is recognised in profi t or loss, unless the asset iscarried at revalued amount, in which case, such reversal is treated as a revaluation increase. However, to theextent that an impairment loss on the same revalued asset was previously recognised as an expense, a reversalof that impairment is also credited to profi t or loss.

62MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.4 Property, plant and equipment (continued)(d)Subsequent expenditureSubsequent expenditure relating to property, plant and equipment that has already been recognised is addedto the carrying amount of the asset only when it is probable that future economic benefi ts associated with theitem will fl ow to the Group and the cost of the item can be measured reliably. All other repair and maintenanceexpenses are recognised in profi t or loss when incurred.(e)DisposalOn disposal of an item of property, plant and equipment, the difference between the disposal proceeds andits carrying amount is recognised in profi t or loss within other operating expenses / (gains). Any amount inrevaluation reserve relating to that asset is transferred to retained profi ts directly.2.5 Intangible assetsGoodwillGoodwill of subsidiaries on or after 1 January 2010 represents the excess of the consideration transferred, theamount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equityinterest in the acquiree over the fair value of the net identifi able assets acquired.Goodwill of subsidiaries prior to 1 January 2010 and on acquisition of associates represents the excess of the costof the acquisition over the fair value of the Group’s share of the net identifi able assets acquired.Goodwill on subsidiaries is recognised separately as intangible assets and carried at cost less accumulatedimpairment losses. Goodwill on associates is included in the carrying amount of the investments.Gains and losses on the disposal of subsidiaries and associates include the carrying amount of goodwill relating tothe entity sold, except for goodwill arising from acquisitions prior to 1 January 2001. Such goodwill was adjustedagainst retained profi ts in the year of acquisition and is not recognised in profi t or loss on disposal.Goodwill recognised separately as an intangible asset is tested for impairment annually and whenever there isindication that the goodwill may be impaired.For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-generating-units(“CGU”) expected to benefi t from synergies arising from the business combination.An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverableamount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell andvalue-in-use.The total impairment loss of a CGU is allocated fi rst to reduce the carrying amount of goodwill allocated to the CGUand then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.An impairment loss on goodwill is recognised as an expense and is not reversed in a subsequent period.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201063Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.6 Investments in subsidiaries and associatesInvestments in subsidiaries and associates are carried at cost less accumulated impairment losses in the Company’sbalance sheet. On disposal of investments in subsidiaries and associates, the difference between disposal proceedsand the carrying amounts of the investments are recognised in profi t or loss.2.7 Impairment of non-fi nancial assetsInvestments in subsidiaries and associatesInvestments in subsidiaries and associates are tested for impairment whenever there is any objective evidence orindication that these assets may be impaired.For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell andthe value-in-use) is determined on an individual asset basis unless the asset does not generate cash infl ows that arelargely independent of those from other assets. If this is the case, the recoverable amount is determined for the CGUto which the asset belongs.If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amountof the asset (or CGU) is reduced to its recoverable amount.The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profi t orloss, unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluationdecrease. Please refer to Note 2.4 for the treatment of a revaluation decrease in property, plant and equipment.An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in theestimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. Thecarrying amount of this asset is increased to its revised recoverable amount, provided that this amount does notexceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation)had no impairment loss been recognised for the asset in prior years.A reversal of impairment loss for an asset other than goodwill is recognised in profi t or loss, unless the asset is carriedat revalued amount, in which case, such reversal is treated as a revaluation increase. However, to the extent that animpairment loss on the same revalued asset was previously recognised as an expense, a reversal of that impairmentis also credited to profi t or loss.2.8 Borrowing costsBorrowing costs are recognised in profi t or loss using the effective interest method except to the extent that theyare capitalised. Borrowing costs are capitalised if they were directly attributable to the acquisition, construction orproduction of a qualifying assets. Capitalising of borrowing costs commences when the activities to prepare the assetfor its intended use or sale are in progress and the expenditure and borrowing costs are being incurred. Borrowingcosts are capitalised until the assets are ready for their intended use or sale.Borrowing costs on general borrowings are capitalised by applying a capitalisation rate to the acquisition, constructionor production of qualifying assets that are fi nanced by general borrowings.

64MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.9 Financial assets(a)ClassificationThe Group classifi es its fi nancial assets in the following categories: at fair value through profi t or loss, loansand receivables, held-to-maturity, and available-for-sale. The classifi cation depends on the nature of the assetand the purpose for which the assets were acquired. Management determines the classifi cation of its fi nancialassets at initial recognition.(i)Financial assets, at fair value through profit or lossThis category has two sub-categories: fi nancial assets held for trading, and those designated at fairvalue through profi t or loss at inception. A fi nancial asset is classifi ed as held for trading if it is acquiredprincipally for the purpose of selling in the short term. Financial assets designated as at fair value throughprofi t or loss at inception are those that are managed and their performances are evaluated on a fair valuebasis, in accordance with a documented Group investment strategy. Derivatives are also categorised asheld for trading unless they are designated as hedges. Assets in this category are presented as currentassets if they are either held for trading or are expected to be realised within 12 months after the balancesheet date.(ii)Loans and receivablesLoans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that arenot quoted in an active market. They are presented as current assets, except for those expected to berealised later than 12 months after the balance sheet date which are presented as non-current assets.Loans and receivables are presented as “trade receivables”, “other receivables” and “cash and cashequivalents” on the balance sheet.(iii)Financial assets, held-to-maturityFinancial assets, held-to-maturity, are non-derivative fi nancial assets with fi xed or determinable paymentsand fi xed maturities that the Group’s management has the positive intention and ability to hold to maturity.If the Group were to sell other than an insignifi cant amount of held-to-maturity fi nancial assets, thewhole category would be tainted and reclassifi ed as available-for-sale. They are presented as non-currentassets, except for those maturing within 12 months after the balance sheet date which are presented ascurrent assets.(iv)Financial assets, available-for-saleFinancial assets, available-for-sale, are non-derivatives that are either designated in this category or notclassifi ed in any of the other categories. They are presented as non-current assets unless managementintends to dispose of the assets within 12 months after the balance sheet date.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201065Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.9 Financial assets (continued)(b)Recognition and derecognitionRegular way purchases and sales of fi nancial assets are recognised on trade-date, the date on which theGroup commits to purchase or sell the asset.Financial assets are derecognised when the rights to receive cash fl ows from the fi nancial assets have expiredor have been transferred and the Group has transferred substantially all risks and rewards of ownership. Ondisposal of a fi nancial asset, the difference between the carrying amount and the sale proceeds is recognisedin profi t or loss. Any amount in the fair value reserve relating to that asset is transferred to profi t or loss.(c)Initial measurementFinancial assets are initially recognised at fair value plus transaction costs except for fi nancial assets at fair valuethrough profi t or loss, which are recognised at fair value. Transaction costs for fi nancial assets at fair valuethrough profi t or loss are recognised immediately as expenses.(d)Subsequent measurementFinancial assets, both available-for-sale and at fair value through profi t or loss are subsequently carried at fairvalue. Loans and receivables and fi nancial assets, held-to-maturity, are subsequently carried at amortised costusing the effective interest method.Changes in the fair values of fi nancial assets at fair value through profi t or loss including the effects of currencytranslation, interest and dividends, are recognised in profi t or loss when the changes arise.Interest and dividend income on fi nancial assets, available-for-sale are recognised separately in profi t or loss.Changes in the fair values of available-for-sale debt securities (i.e. monetary items) denominated in foreigncurrencies are analysed into currency translation differences on the amortised cost of the securities and otherchanges; the currency translation differences are recognised in profi t or loss and the other changes are recognisedin the fair value reserve. Changes in fair values of available-for-sale equity securities (i.e. non-monetary items)are recognised in the fair value reserve, together with the related currency translation differences.(e)ImpairmentThe Group assesses at each balance sheet date whether there is objective evidence that a fi nancial asset or agroup of fi nancial assets is impaired and recognises an allowance for impairment when such evidence exists.

66MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.9 Financial assets (continued)(e)Impairment (continued)(i)Loans and receivables/financial assets, held-to-maturitySignifi cant fi nancial diffi culties of the debtor, probability that the debtor will enter bankruptcy, and defaultor signifi cant delay in payments are objective evidence that these fi nancial assets are impaired.The carrying amount of these assets is reduced through the use of an impairment allowance accountwhich is calculated as the difference between the carrying amount and the present value of estimatedfuture cash fl ows, discounted at the original effective interest rate. When the asset becomes uncollectible,it is written off against the allowance account. Subsequent recoveries of amounts previously written offare recognised against the same line item in profi t or loss.The allowance for impairment loss account is reduced through profi t or loss in a subsequent period whenthe amount of impairment loss decreases and the related decrease can be objectively measured. Thecarrying amount of the asset previously impaired is increased to the extent that the new carrying amountdoes not exceed the amortised cost had no impairment been recognised in prior periods.(ii)Financial assets, available-for-sale2.10 Financial guaranteesIn addition to the objective evidence of impairment described in Note 2.9(e)(i), a signifi cant or prolongeddecline in the fair value of an equity security below its cost is considered as an indicator that the availablefor-salefi nancial asset is impaired.If any evidence of impairment exists, the cumulative loss that was recognised in the fair value reserve isreclassifi ed to profi t or loss. The cumulative loss is measured as the difference between the acquisitioncost (net of any principal repayments and amortisation) and the current fair value, less any impairmentloss previously recognised as an expense. The impairment losses recognised as an expense on equitysecurities are not reversed through profi t or loss.Financial guarantees are contracts that require the issuer to make specifi ed payments to reimburse the holder for aloss it incurs because a specifi ed debtor fails to make payment when due in accordance with the original or modifi edterms of a debt instrument.Financial guarantees are recognised initially at fair value plus transaction cost and are subsequently amortised toprofi t or loss over the period of the subsidiaries’ borrowings, unless it is probable that the Company will reimbursethe bank for an amount higher than the unamortised amount. In this case, the fi nancial guarantees shall be carried atthe expected amount payable to the bank in the Company’s balance sheet.Intragroup transactions are eliminated on consolidation.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201067Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.11 BorrowingsBorrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for atleast 12 months after the balance sheet date.Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost.Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profi t orloss over the period of the borrowings using the effective interest method.2.12 Trade and other payablesTrade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using theeffective interest method.2.13 Derivative fi nancial instrumentsDerivative fi nancial instruments comprise mainly of crude palm oil and palm oil products forward contracts, futurescontracts and currency forward contracts.A derivative fi nancial instrument is initially recognised at its fair value on the date the contract is entered into and issubsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether thederivative is designated as a hedging instrument, and if so, the nature of the item being hedged. Fair value changeson derivatives that are not designated or do not qualify for hedge accounting are recognised in profi t or loss whenthe changes arise.Derivative fi nancial instruments are reported in the fi nancial statements on a net basis where legal right of setoffexists. Derivative fi nancial instruments are carried as assets when fair value is positive and as liabilities when fair valueis negative.2.14 Fair value estimation of fi nancial assets and liabilitiesThe fair values of fi nancial instruments traded in active markets (such as exchange-traded and over-the-countersecurities and derivatives) are based on quoted market prices at the balance sheet date. The quoted market pricesused for fi nancial assets are the current bid prices; the appropriate quoted market prices for fi nancial liabilities arethe current asking prices.The fair values of fi nancial instruments that are not traded in an active market (such as commodities forward contracts)are determined by making references to the prices provided by the Malaysian Palm Oil Board, other similar productsand other commodity exchanges, and makes assumptions that are based on market conditions existing at eachbalance sheet date. Where appropriate, quoted market prices or dealer quotes for similar instruments are used.The fair values of currency forward contracts are determined using actively quoted forward exchange rates.The fair values of current fi nancial assets and liabilities carried at amortised cost approximate their carryingamounts.

68MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.15 Leases(a)As lessee(i)Lessee - Finance leasesLeases where the Group assumes substantially all risks and rewards incidental to ownership of the leasedassets are classifi ed as fi nance leases.The leased assets and the corresponding lease liabilities (net of fi nance charges) under fi nance leases arerecognised on the balance sheet as property, plant and equipment and borrowings respectively, at theinception of the leases based on the lower of the fair value of the leased assets and the present value ofthe minimum lease payments.Each lease payment is apportioned between the fi nance expense and the reduction of the outstandinglease liability. The fi nance expense is recognised in profi t or loss on a basis that refl ects a constantperiodic rate of interest on the fi nance lease liability.(ii)Lessee - Operating leasesLeases where substantially all risks and rewards incidental to ownership are retained by the lessors areclassifi ed as operating leases. Payments made under operating leases (net of any incentives receivedfrom the lessors) are recognised in profi t or loss on a straight-line basis over the period of the lease.Contingent rents are recognised as an expense in profi t or loss when incurred.(b)As lessorLessor - Operating leasesLeases where the Group retains substantially all risks and rewards incidental to ownership are classifi ed asoperating leases. Rental income from operating leases (net of any incentives given to the lessees) is recognisedin profi t or loss on a straight-line basis over the lease term.Initial direct costs incurred by the Group in negotiating and arranging operating leases are added to the carryingamount of the leased assets and recognised as an expense in profi t or loss over the lease term on the samebasis as the lease income.Contingent rents are recognised as income in profi t or loss when earned.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201069Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.16 InventoriesInventories are carried at the lower of cost and net realisable value. Cost is determined on weighted average basis.The cost of fi nished goods and work-in-progress comprises raw materials, direct labour, other direct costs andrelated production overheads (based on normal operating capacity) but excludes borrowing costs. Stores, sparesand consumables are stated at cost and are determined on a weighted average basis. Net realisable value is theestimated selling price in the ordinary course of business, less the estimated costs of completion and applicablevariable selling expenses.2.17 Income taxesCurrent income tax for current and prior periods is recognised at the amount expected to be paid to or recoveredfrom the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by thebalance sheet date.Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilitiesand their carrying amounts in the fi nancial statements except when the deferred income tax arises from the initialrecognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neitheraccounting nor taxable profi t or loss at the time of the transaction.A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries andassociates, except where the Group is able to control the timing of the reversal of the temporary difference and it isprobable that the temporary difference will not reverse in the foreseeable future.A deferred income tax asset is recognised to the extent that it is probable that future taxable profi t will be availableagainst which the deductible temporary differences and tax losses can be utilised.Deferred income tax is measured:(i)(ii)at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferredincome tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enactedby the balance sheet date; andbased on the tax consequence that will follow from the manner in which the Group expects, at the balancesheet date, to recover or settle the carrying amounts of its assets and liabilities.Current and deferred income taxes are recognised as income or expense in profi t or loss, except to the extent thatthe tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax arisingfrom a business combination is adjusted against goodwill.

70MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.18 ProvisionsProvisions for restructuring costs and legal claims are recognised when the Group has a present legal or constructiveobligation as a result of past events, it is more likely than not that an outfl ow of resources will be required to settle theobligation and the amount has been reliably estimated. Restructuring provisions comprise lease termination penaltiesand employee termination payments. Provisions are not recognised for future operating losses.Provisions are measured at the present value of the expenditure expected to be required to settle the obligation usinga pre-tax discount rate that refl ects the current market assessment of the time value of money and the risks specifi cto the obligation. The increase in the provision due to the passage of time is recognised in the consolidated incomestatement as fi nance costs.Changes in the estimated timing or amount of the expenditure or discount rate are recognised in profi t or loss whenthe changes arise.2.19 Employee compensationEmployee benefi ts are recognised as an expense, unless the cost qualifi es to be capitalised as an asset.(a)Defined contribution plansDefi ned contribution plans are post-employment benefi t plans under which the Group pays fi xed contributionsinto separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. TheGroup has no further payment obligations once the contributions have been paid.(b)Employee leave entitlementEmployee entitlements to annual leave are recognised when they accrue to employees. A provision is made for theestimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.2.20 Currency translation(a)Functional and presentation currencyItems included in the fi nancial statements of each entity in the Group are measured using the currency of theprimary economic environment in which the entity operates (“functional currency”). The fi nancial statements arepresented in United States Dollars, which is also the functional currency of the Company.(b)Transactions and balancesTransactions in a currency other than the functional currency (“foreign currency”) are translated into thefunctional currency using the exchange rates at the dates of the transactions. Currency translation differencesfrom the settlement of such transactions and from the translation of monetary assets and liabilities denominatedin foreign currencies at the closing rates at the balance sheet date are recognised in profi t or loss.Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates atthe date when the fair values are determined.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201071Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.20 Currency translation (continued)(c)Translation of Group entities’ financial statementsThe results and fi nancial position of all the Group entities (none of which has the currency of a hyperinfl ationaryeconomy) that have a functional currency different from the presentation currency are translated into thepresentation currency as follows:(i)(ii)(iii)Assets and liabilities are translated at the closing exchange rates at the reporting dates;Income and expenses are translated at average exchange rates (unless the average is not a reasonableapproximation of the cumulative effect of the rates prevailing on the transaction dates, in which caseincome and expenses are translated using the exchange rates at the dates of the transactions); andAll resulting currency translation differences are recognised in the currency translation reserve.2.21 Segment reportingOperating segments are reported in a manner consistent with the internal reporting provided to the executivecommittee whose members are responsible for allocating resources and assessing performance of the operatingsegments.2.22 Cash and cash equivalentsFor the purpose of presentation in the consolidated statement of cash fl ows, cash and cash equivalents include cashon hand, deposits with fi nancial institutions which are subject to an insignifi cant risk of change in value, and bankoverdrafts. Bank overdrafts are presented as current borrowings on the balance sheet.2.23 Share capitalOrdinary shares are classifi ed as equity. Incremental costs directly attributable to the issuance of new ordinary sharesare deducted against the share premium account.2.24 Dividends to Company’s shareholdersDividends to the Company’s shareholders are recognised when dividends are approved for payment.2.25 Non-current assets (or disposal groups) held for sale and discontinued operationsNon-current assets (or disposal groups) are classifi ed as assets held for sale and carried at the lower of carryingamount and fair value less costs to sell if their carrying amount is recovered principally through a sale transactionrather than through continuing use. The assets are not depreciated or amortised while they are classifi ed as held forsale. Any impairment loss on initial classifi cation and subsequent measurement is recognised as an expense. Anysubsequent increase in fair value less costs to sell (not exceeding the accumulated impairment loss that has beenpreviously recognised) is recognised in profi t or loss.

72MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 20102. Significant accounting policies (continued)2.25 Non-current assets (or disposal groups) held for sale and discontinued operations (continued)A discontinued operation is a component of an entity that either has been disposed of, or that is classifi ed as held forsale and:(a)(b)(c)represents a separate major line of business or geographical area of operations; oris part of a single co-ordinated plan to dispose of a separate major line of business or geographical area ofoperations; oris a subsidiary acquired exclusively with a view to resale.2.26 Government grantsGrants from the government are recognised as a receivable at their fair value when there is reasonable assurance thatthe grant will be received and the Group will comply with all the attached conditions.Government grants receivable are recognised as income over the periods necessary to match them with the relatedcosts which they are intended to compensate, on a systematic basis.Government grants relating to assets are deducted against the carrying amount of the assets.3. Critical accounting estimates, assumptions and judgementsEstimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors,including expectations of future events that are believed to be reasonable under the circumstances.(a)Fair value of derivative financial instrumentsThe Group is exposed to fl uctuations in the prices of agri-commodities it deals in including crude palm oil and palmoil products. The Group minimises the risk arising from such fl uctuations by entering into commodities forwardcontracts and futures contracts. As the Group has not adopted hedge accounting, the fair value changes on thesederivative fi nancial instruments are recognised in the profi t or loss when the changes arise.The Group’s commodities forward contracts are not traded in an active market. The Group uses a variety of methods,such as making references to the prices listed on Malaysian Palm Oil Board, other similar products and otherexchanges, and makes assumptions that are based on market conditions existing at each balance sheet date.Quoted market prices or dealer quotes are used to estimate the fair value.As at 31 December 2010, if the commodities prices increase or decrease by 5% and other variables held constant,the Group’s profi t after tax would have been US$6,305,000 (2009: US$4,268,000) lower or higher respectively,arising as a result of the changes in the fair value of the commodities forward contracts and futures contracts.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201073Notes To The Financial StatementsFor the fi nancial year ended 31 December 20103. Critical accounting estimates, assumptions and judgements (continued)(b)Uncertain tax positionsThe Group is subject to income taxes in numerous jurisdictions. In determining the income tax liabilities, managementis required to estimate the amount of capital allowances and the deductibility of certain expenses (“uncertain taxpositions”) at each tax jurisdiction.Two of the Group’s Malaysian overseas subsidiaries were subjected to a routine tax compliance audit by the local taxauthorities.Under the Malaysian self-assessment tax system, the responsibility for correctly assessing tax liability is that of thetax payers. The local tax authorities conduct routine tax compliance audits to ascertain if assessments have beencorrectly made by the tax payers. As the tax compliance audit is still in progress and as the local tax authoritieshave not raised any additional tax assessment to date, the Group has therefore not recognised any additional taxliabilities.(c)Impairment of loans and receivablesManagement reviews its loans and receivables for objective evidence of impairment on a monthly basis. Signifi cantfi nancial diffi culties of the debtor, the probability that the debtor will enter bankruptcy, and default or signifi cant delayin payments are considered objective evidence that a receivable is impaired. In determining this, management makesjudgement as to whether there is observable data indicating that there has been a signifi cant change in the paymentability of the debtor, or whether there have been signifi cant changes with adverse effect in the technological, market,economic or legal environment in which the debtor operates in.Where there is objective evidence of impairment, management makes judgements as to whether an impairmentloss should be recorded as an expense. In determining this, management uses estimates based on historical lossexperience for assets with similar credit risk characteristics. The methodology and assumptions used for estimatingboth the amount and timing of future cash fl ows are reviewed regularly to reduce any differences between theestimated loss and actual loss experience.If the net present values of estimated cash fl ows increase or decrease by 5% from management’s estimates for allpast due loans and receivables, the Group’s allowance for impairment will decrease or increase by US$2,441,000(2009: US$1,447,000) and correspondingly to profi t or loss.(d)Useful lives of plant and equipmentThe cost of plant and equipment are depreciated on a straight-line basis over their useful lives, which managementestimates to be of 20 years.These estimates could change signifi cantly as a result of technical innovations.If the actual useful lives of these plant and equipment differ by 10% from management estimates, the carrying amountof the plant and equipment will be increased by US$846,000 (2009: US$554,000) or decreased by US$1,034,000(2009: US$1,030,000) and correspondingly to profi t or loss.

74MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 20104. RevenueGroup2010 2009US$’000US$’000Sale of agricultural products including palm based edible oils and fats, andother consumer products 3,533,071 2,867,0815. Cost of salesGroup2010 2009US$’000US$’000Cost of inventories 3,280,599 2,614,963Gain from derivative fi nancial instruments (48,341) (33,407)Labour costs and other overheads 40,715 36,1463,272,973 2,617,7026. Other incomeGroup2010 2009US$’000US$’000Interest income on bank deposits 314 129Late interest charge on trade receivables 3,834 2,772Rental income 349 574Other miscellaneous income 664 7005,161 4,175Other miscellaneous income comprises mainly sales of by-products and waste.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201075Notes To The Financial StatementsFor the fi nancial year ended 31 December 20107. Other operating gains/(expenses)Group2010 2009US$’000US$’000Foreign exchange gain/(loss) 6,208 (812)Property, plant and equipment written off (977) (1,439)Loss on disposal of property, plant and equipment (81) (325)5,150 (2,576)8. Finance costsGroup2010 2009US$’000US$’000Interest expense:- Bank borrowings- Finance lease9,673 6,211106 1109,779 6,321In 2010, borrowing costs of US$113,000 was capitalised in property, plant and equipment at a rate of 4.67%.9. Employee compensationGroup2010 2009US$’000US$’000Salaries 38,465 34,686Employer’s contributions to defi ned contribution plans 2,115 1,617Other staff benefi ts 768 33441,348 36,637

76MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201010. Profit before taxThe following items have been included in arriving at profi t before tax:Group2010 2009US$’000US$’000Bad debts written off 266 362Employee compensation (Note 9) 41,348 36,637Depreciation of property, plant and equipment (Note 18) 13,264 10,869Freight 77,256 55,711Transportation and forwarding 6,880 8,260Insurance 4,935 3,888Utilities 8,457 7,145Bank charges 3,216 2,584Lease rental 518 563Non-audit fees-Auditors of the Company 708 27-Other auditors 154 1411. Income tax expenseGroup2010 2009US$’000US$’000Tax expense attributable to profi t is made up of:Current income tax- Singapore 12,408 8,445- Foreign 15,180 30,47027,588 38,915Deferred income tax (12,556) (11,970)15,032 26,945Under/(over) provision in prior fi nancial years- Current income tax 634 906- Deferred income tax 582 (402)16,248 27,449

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201077Notes To The Financial StatementsFor the fi nancial year ended 31 December 201011. Income tax expense (continued)The tax expense on profi t differs from the amount that would arise using the tax calculated at domestic rates of incometax as explained below:Group2010 2009US$’000US$’000Profi t before tax 108,688 117,124Tax calculated at domestic rates applicable to profi ts in the respectivecountries 19,109 28,756Effects of:- Tax incentives (6,928) (2,380)- Expenses not deductible for tax purposes 2,576 1,512- Income not subject to tax (234) (649)- Deferred tax benefi ts not recognised 438 -- Effect of changes in tax rate - (432)- Others 71 13815,032 26,945The Singapore corporate tax rate was 17% for the fi nancial years 2009 and 2010.The Singapore subsidiaries’ tax liabilities have been measured based on the corporate tax rate and tax laws prevailing atbalance sheet date. On 18 February 2011, the Singapore Minister of Finance announced changes to the Singapore taxlaws, which included new incentives that might be available to certain entities with effect from the year of assessment 2011.The Singapore subsidiaries’ tax expense for the fi nancial year ended 31 December 2010 has not taken into considerationthe effect of these incentives as these incentives were not enacted or substantively enacted by the balance sheet date.The Malaysia corporate tax rates was 25% for the fi nancial years 2009 and 2010.The weighted average applicable tax rate was 17.6% and 24.6% for the fi nancial years ended 31 December 2010 and31 December 2009 respectively. The changes in weighted average applicable tax rates arose from changes in the mix ofincome subject to tax in different countries and the tax incentive granted.

78MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201012. Earnings per shareBasic earnings per share is calculated by dividing the net profi t attributable to equity holders of the Company for therelevant periods by the weighted average number of ordinary shares outstanding during the fi nancial year.Group2010 2009Net profi t attributable to equity holders of the Company (US$’000) 92,352 89,191Weighted average number of ordinary shares outstanding for basic earningsper share (‘000) (Note (i)) 1,304,537 1,281,002Basic earnings per share (US cents per share) 7.08 6.96(i)The earnings per share for the fi nancial years ended 31 December 2010 and 2009 were computed based onweighted average number of shares adjusted to take into account the subdivision and issue of new ordinary shares.The Company’s pre-invitation capital of 1,281,002,440 Shares were assumed to be issued throughout the relevantperiods.Diluted earnings per share is the same as the basic earnings per share for the fi nancial years ended 31 December 2010and 2009 as there were no potential dilutive ordinary shares outstanding.13. InventoriesGroup2010 2009US$’000US$’000Raw materials 37,542 51,938Finished goods 201,322 85,692Stores, spares and consumables 5,095 5,775243,959 143,405The cost of inventories recognised as an expense and included in “cost of sales” amounts to US$3,280,599,000 (2009:US$2,614,963,000).Inventories of US$58,037,000 (2009: US$41,930,000) of the Group have been pledged as security for bank facilities ofthe Group (Note 23(a)).Inventories include US$179,637,000 (2009: US$73,388,000) readily marketable inventories, which are agriculturalcommodity inventories that can be readily converted to cash due to their commodity nature, international pricing mechanismand widely available markets.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201079Notes To The Financial StatementsFor the fi nancial year ended 31 December 201014. Trade receivablesGroup2010 2009US$’000US$’000Trade receivables 443,500 297,776Less: Allowance for impairment of trade receivables (16,391) (18,102)Trade receivables - net 427,109 279,674Trade receivables include US$8,631,000 (2009: US$19,274,000) due from related parties.Related parties are companies in which the directors/shareholders of the Company have signifi cant infl uence or control.15. Other receivablesGroupCompany2010 2009 2010 2009US$’000 US$’000 US$’000 US$’000Non-trade receivables 9,553 24,685 44,616 -Dividends receivable - - 17,273 26,258Deposits 12,621 2,748 - -Prepayments 4,525 2,277 1 126,699 29,710 61,890 26,259GroupNon-trade receivables include US$6,167,000 (2009: US$2,425,000) subsidy receivable from Malaysian Palm Oil Board.In 2009, non-trade receivables included US$5,769,000 held in commodity trading accounts with Bursa Malaysia DerivativesClearing Bhd. In 2010, the commodity trading accounts with Bursa Malaysia Derivatives Clearing Bhd was in a net payableposition (Note 22).In 2009, non-trade receivables also included US$15,629,000 due from related parties, mainly the advance for the acquisitionof a subsidiary as disclosed in Note 34(a) on signifi cant business combinations. The amount, which has been settled, wasinterest-free, unsecured and repayable on demand.Deposits include US$4,633,000 payment for the purchase of leasehold land.

80MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201015. Other receivables (continued)CompanyNon-trade receivables include US$38,404,000 short term loans to subsidiaries, which bear interest of 2.0% per annum andrepayable within 12 months and advances to a subsidiary of US$6,212,000 which is interest free and repayable on demand.Dividends receivable relates to dividends declared and unpaid by subsidiaries for prior fi nancial years of which amount isnon-interest bearing and repayable on demand.16. Derivative financial instruments(a)Current portionContract/notionalGroupFair valuesamount Asset LiabilityUS$’000 US$’000 US$’0002010Currency forward contracts (Note 31(e)) 1,022,492 29,113 -Commodities forward contracts (Note 31(e)) 1,787,090 30,865 66,674Futures contracts on commodity exchange (Note 31(e)) 214,554 27,062 -Total 87,040 66,6742009Currency forward contracts (Note 31(e)) 399,831 6,135 -Commodities forward contracts (Note 31(e)) 3,365,026 29,117 13,624Futures contracts on commodity exchange (Note 31(e)) 526,844 6,001 -Total 41,253 13,624(b)Non-current portionContract/notionalGroupFair valuesamount Asset LiabilityUS$’000 US$’000 US$’0002010Commodities forward contracts (Note 31(e)) 5,742 761 -Futures contracts on commodity exchange (Note 31(e)) 33,736 3,681 -Total 4,442 -

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201081Notes To The Financial StatementsFor the fi nancial year ended 31 December 201016. Derivative financial instruments (continued)(i)(ii)Currency forward contracts are entered into by the Group entities in currencies other than their respective functionalcurrencies to manage exposure to fl uctuations in foreign currency exchange rates on their transactions.The Group entities enter into commodities forward contracts and futures contracts to protect the Group frommovements in market prices of crude palm oil and palm oil products by establishing the price at which the productswill be sold or purchased.17. Cash and cash equivalentsGroupCompany2010 2009 2010 2009US$’000 US$’000 US$’000 US$’000Cash at bank and on hand 195,558 28,253 142,863 -Short-term bank deposits 19,764 9,381 - -215,322 37,634 142,863 -For the purposes of the consolidated statement of cash fl ows, the cash and cash equivalents comprise the following:Group2010 2009US$’000US$’000Cash and bank balances(as above)Less: Bank overdrafts(Note 23)Less: Restricted short-termbank depositsCash and cash equivalentsper consolidatedstatement of cash fl ows215,322 37,634- (107)(170) (151)215,152 37,376Restricted short-term bank deposits are deposits placed with a fi nancial institution as security for banking facilities.

82MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201018. Property, plant and equipmentFurniture,Leasehold fixtures CapitalFreehold land land and Plant and and office Motor expenditureand buildings buildings equipment equipment vehicles in progress TotalUS$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000Group2010CostBeginning of the fi nancial year 59 54,080 156,850 11,465 6,102 20,190 248,746Currency translation differences 12 5,653 17,907 993 468 2,984 28,017Additions 1 432 3,759 1,926 795 33,639 40,552Acquisition of subsidiaries - 86 6 - 31 - 123Disposals - (2) (365) (495) (843) (491) (2,196)Write off (2) - (3,625) (174) - (2) (3,803)Reclassifi cation 137 (109) 11,670 5 - (11,703) -End of the fi nancial year 207 60,140 186,202 13,720 6,553 44,617 311,439Accumulated depreciationBeginning of the fi nancial year 15 7,492 57,590 7,305 2,995 - 75,397Currency translation differences 4 826 7,328 674 248 - 9,080Depreciation charge 3 1,260 9,694 1,361 946 - 13,264Disposals - (2) (291) (487) (629) - (1,409)Write off (1) - (2,682) (143) - - (2,826)Reclassifi cation 44 (44) - - -- -End of the fi nancial year 65 9,532 71,639 8,710 3,560 - 93,506Net book valueEnd of the fi nancial year 142 50,608 114,563 5,010 2,993 44,617 217,933

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201083Notes To The Financial StatementsFor the fi nancial year ended 31 December 201018. Property, plant and equipment (continued)Furniture,Leasehold fixtures CapitalFreehold land land and Plant and and office Motor expenditureand buildings buildings equipment equipment vehicles in progress TotalUS$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000Group2009CostBeginning of the fi nancial year 58 56,345 147,303 10,485 5,810 13,981 233,982Currency translation differences 1 908 2,594 186 152 368 4,209Additions - 1,440 4,809 999 1,536 12,475 21,259Disposals - (6,129) (937) (210) (1,396) (463) (9,135)Write off - - (1,463) (105) - (1) (1,569)Reclassifi cation - 1,516 4,544 110 - (6,170) -End of the fi nancial year 59 54,080 156,850 11,465 6,102 20,190 248,746Accumulated depreciationBeginning of the fi nancial year 15 6,637 49,209 6,277 3,075 - 65,213Currency translation differences (1) 139 1,163 85 71 - 1,457Depreciation charge 1 1,124 7,684 1,170 890 - 10,869Disposals - (408) (465) (122) (1,041) - (2,036)Write off - - (1) (105) - - (106)End of the fi nancial year 15 7,492 57,590 7,305 2,995 - 75,397Net book valueEnd of the fi nancial year 44 46,588 99,260 4,160 3,107 20,190 173,349

84MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201018. Property, plant and equipment (continued)(a)In 2009, additions included US$783,000 plant and equipment, and motor vehicles acquired under fi nance leases.The carrying amounts of plant and equipment and motor vehicles acquired under fi nance leases as at 31 December2010 was US$987,000 (2009: US$1,236,000).(b)(c)Bank borrowings are secured on property, plant and equipment of the Group with carrying amounts of US$177,743,000(2009: US$138,946,000).The revalued property, plant and equipment deemed as cost are as follow:Group2010 2009US$’000US$’000Leasehold land and building 10,369 9,446Plant and machinery 19,469 19,540Furniture, fi xture and offi ce equipment 238 21430,076 29,200(d) The title to a certain freehold land of a subsidiary with carrying amount of US$41,800 as at 31 December 2010 (2009:US$41,800) has yet to be issued by the relevant authorities.19. Investment in associate and subsidiaries(a) Investment in associateGroup2010 2009US$’000US$’000Equity investment at costBeginning of the fi nancial year - -Acquisition of associate 83 -Share of profi t of associate 3 -End of the fi nancial year 86 -

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201085Notes To The Financial StatementsFor the fi nancial year ended 31 December 201019. Investment in associate and subsidiaries (continued)(a) Investment in associate (continued)The summarised fi nancial information of associate, not adjusted for the proportion ownership interest held by the Group,is as follows:Group2010 2009US$’000US$’000Assets 626 -Liabilities (329) -Revenue 2,056 -Net profi t 121 -Details of the associate are included in Note 38.(b) Investment in subsidiariesCompany2010 2009US$’000US$’000Equity investments at costBeginning and end of the fi nancial year *- *-* The nominal value of investment in subsidiaries held directly by the Company is US$104.Details of signifi cant subsidiaries are included in Note 38.

86MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201020. Intangible assetGroup2010 2009US$’000US$’000Composition:Goodwill 5,205 -On 27 December 2010, the Group completed the acquisition of 52.0% of the issued equity of Molly Foods bvba (“MollyFoods”), a company incorporated in Belgium which, through its wholly owned subsidiary, Bloom Land Enterprises Limited(“Bloom Land”), a company incorporated in Hong Kong, owns 100% of BeCe S.à.r.l. (“BeCe”), a company incorporated inTogo, involved primarily in importing commodities, including edible oils and fats products produced by the Group, for salein West Africa (Note 34 (b)).The shares in Molly Foods have been acquired for a cash consideration of EUR4.68 million by the Group from OlivalBVBA and Atmaca Beheer B.V., closed limited liability companies organised and existing under the laws of Belgium andNetherlands respectively.Goodwill in relation to the acquisition of Molly Foods, Bloom Land and BeCe have been determined provisionally as theunderlying audit is still ongoing.The purchase price allocation to goodwill, intangibles (excluding goodwill) and other assets and liabilities is currently beingassessed and is expected to be fi nalised within 12 months from the date of acquisition and hence the goodwill has notbeen allocated to the relevant cash-generating-units.21. Trade payablesGroup2010 2009US$’000US$’000Trade payables 252,785 135,464Trade payables include US$2,173,000 (2009: US$1,381,000) due to related parties, which were unsecured, interest freeand repayable on demand.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201087Notes To The Financial StatementsFor the fi nancial year ended 31 December 201022. Other payablesGroupCompany2010 2009 2010 2009US$’000 US$’000 US$’000 US$’000Non-trade payables 16,664 39,958 18,294 26,248Accrued operating expenses 33,231 27,282 2,641 -49,895 67,240 20,935 26,248GroupNon trade payables include US$147,000 (2009: US$Nil) due to an associate and US$11,000 (2009: US$838,000) due torelated parties, mainly for transportation, forwarding and insurance services. The amounts are unsecured, interest free andrepayable on demand.In 2009, non-trade payables also included US$15,000 due to shareholder of a subsidiary, US$1,105,000 due to a directorof the Company and US$26,230,000 dividend payable to shareholders, which have been settled.Non-trade payables include US$8,670,000 (2009: US$Nil) held in commodity trading accounts with Bursa MalaysiaDerivatives Clearing Bhd. In 2009, the commodity trading accounts with Bursa Malaysia Derivatives Clearing Bhd was in anet receivable position (Note 15).CompanyNon-trade payables relates to amounts owing to subsidiaries of the Company which are unsecured, interest free andrepayable on demand.Accrued operating expenses of the Company mainly relates to listing expenses payable at the end of the fi nancial year.

88MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201023. BorrowingsGroup2010 2009US$’000US$’000CurrentBank overdrafts - 107Bank borrowings- Export credit refi nancing 31,658 2,320- Bankers’ acceptance 136,730 156,970- Revolving credit 12,275 12,402- Trust receipts and bills payable 116,226 23,298- Term loans 6,796 6,109- Istina/Ijarah Financing 3,708 5,295Finance lease liabilities (Note 23(c)) 381 432307,774 206,933Non-currentBank borrowings- Term loans 15,898 1,055- Istina/Ijarah Financing 1,936 12,141Finance lease liabilities (Note 23(c)) 525 72518,359 13,921Total borrowings 326,133 220,854(a)Securities grantedThe borrowings of the Group are secured by:- Letter of subordination of shareholders and/or group entities- Joint and several guarantees by certain directors- Security Sharing Agreement, debentures and legal assignment over the absolute rights of a subsidiary of theGroup under Sales and Purchase Agreement for the subsidiary’s land, in favour of fi nancial institution as trusteefor the said fi nancial institution and another fi nancial institution- Fixed and fl oating charge over existing and future assets of the subsidiaries- Corporate guarantees by the Company, subsidiaries and a related party

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201089Notes To The Financial StatementsFor the fi nancial year ended 31 December 201023. Borrowings (continued)(a)Securities granted (continued)Finance lease liabilities are secured over the leased plant and equipment and motor vehicles as at 31 December2010 with carrying value of US$987,000 (2009: US$1,236,000) as the legal title is retained by the lessor and will betransferred to the Group upon full settlement of the fi nance lease liabilities.The exposure of the borrowings of the Group to interest rate changes and the contractual repricing dates at thebalance sheet dates are as follows:Group2010 2009US$’000US$’000Not later than one year 307,774 206,933Between one and two years 13,482 6,979Between two and fi ve years 4,877 6,942326,133 220,854(b)Fair value of non-current borrowingsThe fair value of borrowings approximates the carrying value of the borrowings at balance sheet dates.(c)Finance lease liabilitiesThe Group leases certain plant and equipment under fi nance leases.Group2010 2009US$’000US$’000Minimum lease payments dueNot later than one year 387 486Between one and two years 476 27Between two and fi ve years 149 7961,012 1,309Less: Future fi nance charges (106) (152)Present value of fi nance leaseliabilities 906 1,157

90MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201023. Borrowings (continued)(c)Finance lease liabilities (continued)The present values of fi nance lease liabilities are analysed as follows:Group2010 2009US$’000US$’000Not later than one year 381 432Later than one year- Between one and two years 425 22- Between two and fi ve years 100 703525 725Total 906 1,15724. Deferred income taxesDeferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income taxassets against current income tax liabilities and when the deferred income taxes relate to the same fi scal authority. Theamounts, determined after appropriate offsetting, are shown on the balance sheets as follows:Group2010 2009US$’000US$’000Deferred income tax liabilities- expected to be settled within one year (14,339) (18,493)- expected to be settled after one year (1,114) (5,685)(15,453) (24,178)Deferred income tax assets are recognised for tax losses and capital allowances carried forward to the extent that realisationof the related tax benefi ts through future taxable profi ts is probable. The tax losses and capital allowances have no expirydates.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201091Notes To The Financial StatementsFor the fi nancial year ended 31 December 201024. Deferred income taxes (continued)The amounts of deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction)recognised in the consolidated balance sheet and consolidated income statement on each type of temporary differencesare as follows:ConsolidatedBalance SheetGroupConsolidatedIncome Statement2010 2009 2010 2009US$’000 US$’000 US$’000 US$’000Deferred income tax assetsUnutilised tax losses 45 84 (47) (1,875)Unutilised reinvestment allowance 4,611 3,698 866 (2,049)Unrealised loss on derivative fi nancial instruments 6,572 - 13,981 -Unutilised capital allowance - 254 (271) (1,690)Others 991 1,837 (1,048) 95212,219 5,873Deferred income tax liabilitiesAccelerated tax depreciation (24,981) (20,625) (1,883) (1,157)Revaluation of property, plant and equipments (2,691) (2,786) 376 85Unrealised gain on derivative fi nancial instruments - (6,640) - 16,703Others - - - 1,403(27,672) (30,051) 11,974 12,372Deferred income tax assets are recognised for tax losses and capital allowances carried forward to the extent that realisationof the related tax benefi ts through future taxable profi ts is probable. The Group has unrecognised tax losses of US$181,000(2009: US$337,000) and capital allowances of US$Nil (2009: US$1,017,000) at the balance sheet date which can becarried forward and used to offset against future taxable income subject to meeting certain statutory requirements bythose companies with unrecognised tax losses and capital allowances in their respective countries of incorporation. Thetax losses have no expiry date.Deferred income tax liabilities of US$92,000 (2009: US$59,000) have not been recognised for the withholding and othertaxes that will be payable on the earnings of an overseas subsidiary when remitted to the holding company. These unremittedearnings are permanently reinvested and amount to US$916,000 (2009: US$594,000) at the balance sheet date.

92MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201025. Share capital and share premiumCompany2010Beginning of the fi nancial year, ordinaryshares at par value, USD0.01No. of ordinary shares AmountAuthorisedsharecapital atpar value ofUS$0.001/US$0.01Issuedsharecapital atpar value ofUS$0.001/US$0.01Authorisedsharecapital atpar value ofUS$0.001/US$0.01Sharecapital atpar value ofUS$0.001/US$0.01Sharepremium‘000 ‘000 US$’000 US$’000 US$’0005,000 1,050 50 11 -Listing of the Company, ordinaryshares at par value, USD0.001Subdivision of authorised share capital 50,000 10,500 50 11 -and issued share capital from parvalue of USD0.01 to USD0.001(Notes (a) to (b))Increase in authorised share capital 29,950,000 - 29,950 - -(Note (c))Issue of new shares to existing- 1,270,502 - 1,270 -shareholders (Note (d))Issue of shares pursuant to the Listing- 226,059 - 226 191,055(Note (e))Placing and listing expenses- - - - (5,639)(Note (f))End of the fi nancial year 30,000,000 1,507,061 30,000 1,507 185,4162009Beginning and end of the fi nancialyear, ordinary shares at par value,USD0.015,000 1,050 50 11 -All issued ordinary shares are fully paid. Fully paid ordinary shares carry one vote per share and carry a right to dividendsas and when declared by the Company.On 1 October 2010, the Shareholders approved the following:(a)(b)the sub-division of the authorised share capital from US$50,000 divided into 5,000,000 shares of a par value ofUS$0.01 each in the capital of the Company to US$50,000 divided into 50,000,000 shares of par value US$0.001each in the capital of the Company;the sub-division of 1,050,002 issued and paid up shares of par value US$0.01 each in the capital of the Companyinto 10,500,020 Shares of par value US$0.001 each in the capital of the Company;

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201093Notes To The Financial StatementsFor the fi nancial year ended 31 December 201025. Share capital and share premium (continued)(c)(d)(e)(f)the increase in the authorised share capital from US$50,000 divided into 50,000,000 shares of par value US$0.001each in the capital of the Company to US$30,000,000 of 30,000,000,000 Shares of par value US$0.001 each inthe capital of the Company by the creation of 29,950,000,000 Shares of par value US$0.001 each in the capital ofthe Company; andthe issue and allotment of 1,270,502,420 new shares of par value US$0.001 each (US$1,270,000) in the capitalof the Company to the shareholders as at the date of the resolution in proportion to their shareholding, for a cashconsideration at US$0.001 per new Share.On 24 November 2010, the Company issued 226,059,000 each at SGD1.10 per share as placement inconnection with the Listing and raised gross proceeds of US$191,281,000 (SGD248,665,000). US$226,000 andUS$191,055,000 have been recognised in share capital and share premium respectively. The net proceeds receivedfrom the placement and listing amounted to US$183,582,000, after deducting placing and listing expenses of theCompany (“Listing Expenses”) of US$7,699,000 paid during the year.During the fi nancial year ended 31 December 2010, Listing Expenses amounted to US$10,376,000. ListingExpenses of US$5,639,000 which were directly attributable to the issuance of new shares were deducted againstshare premium account. The remaining balance of US$4,737,000 were charged to the income statement.The newly issued shares rank pari passu in all aspects with the previously issued shares.26. ReservesGroup2010 2009(a)US$’000US$’000Composition:Merger reserve (50,749) (38,834)General reserve (832) -Asset revaluation reserve 10,281 11,031Currency translation reserve 31,794 6,509(9,506) (21,294)Merger reserve represents the difference between the cost of investment and nominal value of share capital of the mergedsubsidiary.

94MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201026. Reserves (continued)Group2010 2009(b)US$’000US$’000Movements(i) Merger reserveBeginning of the fi nancial year (38,834) (38,834)Additions arising from merger of subsidiary during the year (11,915) -End of the fi nancial year (50,749) (38,834)(ii)(iii)(iv)General reserveBeginning of the fi nancial year - 2,835Transfer to retained earnings - (2,835)Acquisition of non-controlling interests (832) -End of the fi nancial year (832) -Asset revaluation reserveBeginning of the fi nancial year 11,031 11,139Realisation upon disposal of asset (750) (108)End of the fi nancial year 10,281 11,031Currency translation reserveBeginning of the fi nancial year 6,509 (85)Net currency translation differences of foreign operations 25,385 6,564Non-controlling interests (100) 30End of the fi nancial year 31,794 6,509The reserves are non-distributable.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201095Notes To The Financial StatementsFor the fi nancial year ended 31 December 201027. Contingent liabilitiesGroup(a)Mewah-Oils Sdn Bhd, a wholly-owned subsidiary, together with a Director of the Company, had been charged withcustom offences in relation to usage of documents that have been falsifi ed for the purpose of discharging crude palmoil from two shipments in October and November 2003. The maximum penalty under law for the charges againstthe subsidiary and the Director under the Malaysian Customs Act is a fi ne not exceeding fi ve hundred thousandMalaysian Ringgit or imprisonment for a term not exceeding fi ve years or both.The subsidiary has also been charged with two additional charges of dishonestly receiving 1,998.518 metric tonnesand 4,999.85 metric tonnes, respectively of crude palm oil with reason to believe that it was a stolen property, inviolation of Section 411 of the Malaysian Penal Code. The maximum penalty for these charges under Malaysian PenalCode is imprisonment for a term of fi ve years and a fi ne.In April 2010, a civil claim was made by original owners of the crude palm oil against the subsidiary in the MalaysianHigh Courts for having wrongfully received and converted 6,998.368 MT of crude palm oil (being part of the crudepalm oil which is the subject matter of the criminal proceedings referred to above). The amount claimed is for a totalof US$2.65 million and interest at 8% per annum from the alleged date of conversion of the crude palm oil, which isbetween October 2003 and November 2003, and costs.The directors, based on the advice of their solicitors, are of the opinion that the charges and suits against thesubsidiary and the Director are without merit and hence no provision has been made in the fi nancial statements.(b)In 2009, a claim against Moi Foods Malaysia Sdn Bhd (“Moi Foods”), a wholly-owned subsidiary, in the High Court ofMalaya, Shah Alam, in the State of Darul Ehsan, Malaysia for the amount of Malaysian Ringgit 836,805 (US$216,321)for alleged non-payment by Moi Foods of a construction contract entered into in 2001 between the claimants andMewah-Oils Sdn Bhd (which subsequently novated the contract of Moi Foods) to construct a building block consistingof warehouse and offi ces on Lot 40 Phase 2A Pulau Indah Industrial Park. Moi Foods is currently preparing to fi le adefence disputing the amount claimed. The Group has made a provision of approximately Malaysian Ringgit 514,000(US$185,000).CompanyThe Company has issued corporate guarantee to a bank for borrowings of a certain subsidiary. As at 31 December 2010,the borrowings under the guarantee amounted to US$53,125,000.

96MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201028. Commitments(a)Capital commitmentsCapital expenditures contracted for at the balance sheet dates but not recognised in the consolidated fi nancialstatements are as follows:Group2010 2009US$’000US$’000Purchases of property, plant and equipment 75,161 22,397(b)Operating lease commitments – where the Group is a lesseeThe Group leases offi ce premises under non-cancellable operating lease agreements. The leases have varying terms,escalation clauses and renewal rights.The future aggregate minimum lease payables under non-cancellable operating leases contracted for at the balancesheet dates but not recognised as liabilities, are as follows:Group2010 2009US$’000US$’000Not later than one year 220 193Between one and fi ve years 1,124 461Later than fi ve years 3,698 2,2865,042 2,940

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201097Notes To The Financial StatementsFor the fi nancial year ended 31 December 201028. Commitments (continued)(c)Operating lease commitments – where the Group is a lessorThe Group leases out offi ce space under its leasehold buildings to non-related parties under non-cancellableoperating leases.The future aggregate minimum lease receivables under operating leases contracted for at the balance sheet date butnot recognised as receivables, are as follows:Group2010 2009US$’000US$’000Not later than one year 68 73Between one and fi ve years 23 -91 7329. Retained profits(a)(b)Retained profi ts of the Group are distributable, to the extent that it is in compliance with the local guidelines ofthe countries in which the subsidiaries operate and the restrictions imposed by the covenant underlying ourborrowings.Movement in (accumulated losses)/retained profi ts for the Company is as follows:Company2010 2009US$’000US$’000Beginning of the fi nancial year - (12)Dividends (Notes 30(d) and Note 30(b)) (22,105) (26,230)Total comprehensive income for the fi nancial year 19,000 26,242End of the fi nancial year (3,105) -

98MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201030. DividendsGroup2010 2009US$’000US$’000Ordinary dividends paid/payableInterim exempt dividends of 1.73 cents (2009: 4.18 cents) per share paid inrespect of current fi nancial year 22,105 53,596(a)(b)(c)(d)The dividend per share for the fi nancial years ended 31 December 2010 and 2009 were computed based on numberof shares adjusted to take into account the subdivision and issue of new ordinary shares. The Company’s preinvitationcapital of 1,281,002,440 Shares were assumed to be issued throughout the relevant periods.Included in the interim exempt dividends for the fi nancial year ended 31 December 2009 are dividends to theshareholders of approximately US$26,230,000. The remaining amounts of approximately US$27,366,000 aredividends to the previous holding companies of subsidiaries prior to the reorganisation excercise by the Company.In 2009, the Company declared interim dividend of approximately US$26,230,000 (SGD36,855,000) of whichapproximately US$24,085,000 (SGD33,500,000) has been fully paid and balance of approximately US$2,145,000(SGD3,355,000) was converted to shareholders’ loan and was subsequently paid.In 2010, the Company declared an interim dividend of US$22,105,000 (SGD30,903,000), which was converted toshareholders’ loan was subsequently paid.31. Financial risk managementFinancial risk factorsThe Group’s activities expose it to market risk (including currency risk, commodity price risk and interest rate risk), credit riskand liquidity risk. The Group’s overall risk management strategy seeks to minimise adverse effects from the unpredictabilityof fi nancial markets on the Group’s fi nancial performance. The Group’s risk management strategy provides for the use offi nancial instruments such as currency forward contracts, commodities forward and futures contracts of crude palm oil andpalm oil products.Financial risk management is carried out by a Risk Committee in accordance with the policies set by the Board of Directors.The Risk Committee works closely with the Group’s operating units in identifying, evaluating and managing fi nancial risks.Regular reports will be submitted to the Board of Directors.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 201099Notes To The Financial StatementsFor the fi nancial year ended 31 December 201031. Financial risk management (continued)(a)Market risk(i)Currency riskThe Group’s revenue is denominated primarily in United States Dollars (“USD”), the functional and reporting currencyof the Company. There are some exposures in other currencies, the most signifi cant of which are the MalaysianRinggit (“Ringgit”) and Singapore Dollar (“SGD”). Currency risk arises within entities in the Group when transactionsare denominated in currencies other than the entities’ functional currencies.The Group’s risk management strategy provides for the use of currency forward contracts to hedge its futurecommitted foreign exchange exposures, if necessary.The Group’s currency exposure based on the information provided to key management is as follows:USD SGD Ringgit Others TotalUS$’000 US$’000 US$’000 US$’000 US$’000At 31 December 2010AssetsCash and cash equivalents 23,548 143,623 28,822 19,329 215,322Trade and other receivables 305,412 3,514 55,268 85,089 449,283Intercompany receivables 547,044 78,196 149,238 43,988 818,466Total assets 876,004 225,333 233,328 148,406 1,483,071LiabilitiesBorrowings (128,103) (1,696) (192,883) (3,451) (326,133)Other fi nancial liabilities (136,926) (23,825) (136,103) (5,826) (302,680)Intercompany payables (547,044) (78,196) (149,238) (43,988) (818,466)Total liabilities (812,073) (103,717) (478,224) (53,265) (1,447,279)Net financial assets/(liabilities) 63,931 121,616 (244,896) 95,141 35,792Firm commitments and highly probable 346,922 8,353 (424,551) 27,596 (41,680)forecast transactions in foreigncurrenciesCurrency forward contracts (686,267) 3,051 - (71,193) (754,409)Currency profi le (275,414) 133,020 (669,447) 51,544 (760,297)Financial assets/(liabilities) denominatedin the respective entities functionalcurrencies 183,880 (4,556) 667,706 (41,787) 805,243Currency exposure of fi nancial assets/(liabilities) net of those denominatedin the respective entities’ functionalcurrencies (91,534) 128,464 (1,741) 9,757 44,946

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010101Notes To The Financial StatementsFor the fi nancial year ended 31 December 201031. Financial risk management (continued)(a)Market risk (continued)(i)Currency risk (continued)The Company’s currency exposure based on the information provided to key management is as follows:(continued)USD SGD Ringgit Others TotalUS$’000 US$’000 US$’000 US$’000 US$’000At 31 December 2010AssetsCash and cash equivalents - 142,863 - - 142,863Intercompany receivables - 44,616 17,274 - 61,890Total assets - 187,479 17,274 - 204,753LiabilitiesOther fi nancial liabilities (835) (1,777) (29) - (2,641)Intercompany payables (150) (18,144) - - (18,294)Total liabilities (985) (19,921) (29) - (20,935)Net financial assets/(liabilities) (985) 167,558 17,245 - 183,818Financial assets/(liabilities) denominatedin the Company’s functional currency 985 - - - 985Currency exposure of fi nancial assets/(liabilities) net of those denominatedin the Company’s functional currency - 167,558 17,245 - 184,803

102MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201031. Financial risk management (continued)(a)Market risk (continued)(i)Currency risk (continued)The Company’s currency exposure based on the information provided to key management is as follows:(continued)USD SGD Ringgit Others TotalUS$’000 US$’000 US$’000 US$’000 US$’000At 31 December 2009AssetsIntercompany receivables - 9,609 16,650 - 26,259LiabilitiesDividend payable - (26,230) - - (26,230)Intercompany payables (4) (14) - - (18)Total liabilities (4) (26,244) - - (26,248)Net financial assets/(liabilities) (4) (16,635) 16,650 - 11Financial assets/(liabilities) denominatedin the Company’s functional currency 4 - - - 4Currency exposure of fi nancial assets/(liabilities) net of those denominated inthe Company’s functional currency - (16,635) 16,650 - 15

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010103Notes To The Financial StatementsFor the fi nancial year ended 31 December 201031. Financial risk management (continued)(a)Market risk (continued)(i)Currency risk (continued)With all other variables including tax rate being held constant, the effects arising from the net fi nancial asset/liability position will be as follows:2010 2009ChangeIncrease/(decrease)Profitafter tax ChangeProfitafter tax% US$’000 % US$’000GroupUSD against SGD- Strengthened 5% (8,481) 5% 1,282- Weakened 5% 8,481 5% (1,282)USD against Ringgit- Strengthened 5% (4,038) 5% (1,478)- Weakened 5% 4,038 5% 1,478SGD against Ringgit- Strengthened 5% (182) 5% (641)- Weakened 5% 182 5% 641CompanyUSD against SGD- Strengthened 5% (8,376) 5% 831- Weakened 5% 8,376 5% (831)USD against Ringgit- Strengthened 5% (862) 5% (832)- Weakened 5% 862 5% 832SGD against Ringgit- Strengthened 5% 7,514 5% (1,664)- Weakened 5% (7,514) 5% 1,664

104MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201031. Financial risk management (continued)(a)Market risk (continued)(ii)Cash flows and fair value interest rate risksCash fl ows interest rate risk is the risk that the future cash fl ows of a fi nancial instrument will fl uctuate becauseof changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a fi nancialinstrument will fl uctuate due to changes in market interest rates. The Group has cash and bank balances anddeposits placed with creditworthy licensed banks and fi nancial institutions.The Group’s policy is to enter into variable interest rates borrowings. The Group’s exposure to cash fl owsinterest rate risks arises mainly from non-current variable-rate borrowings.As most of the Group’s borrowings are short-term and trade related, accordingly, the Group has minimum cashfl ows interest rate exposure risk.The Group’s borrowings are denominated mainly in Ringgit. At 31 December 2010, profi t after tax for the yearwould have been US$79,000 (2009: US$5,000) respectively lower or higher if Ringgit market interest rates hadbeen 50 basis points higher or lower with all other variables held constant.(iii)Commodity price riskThe Group is exposed to fl uctuations in the prices of agri-commodities it deals in, including crude palm oiland palm oil products prices. The Group minimises the risk arising from such fl uctuations by entering intocommodities forward contracts and futures contracts. The Group has not adopted Hedge accounting.In the course of entering into their contracts, the Group may be exposed to the inherent risk associated withtrading activities conducted by its personnel. The Group has in place a risk management system to managesuch risk exposure.As at 31 December 2010, if the commodity prices increase or decrease by 5% and other variables heldconstant, the Group’s profi t after tax would have been US$6,305,000 (2009: US$4,268,000) lower or higherrespectively, arising as a result of the change in fair value of the commodities forward and futures contracts.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010105Notes To The Financial StatementsFor the fi nancial year ended 31 December 201031. Financial risk management (continued)(b)Credit riskCredit risk refers to the risk that counterparty will default on its contractual obligations resulting in fi nancial loss to theGroup. The major classes of fi nancial assets of the Group are trade and other receivables and bank deposits. Fortrade and other receivables, the Group adopts the policy of dealing only with customers of appropriate credit history,and obtaining suffi cient collateral or buying credit insurance where appropriate to mitigate credit risk. For otherfi nancial assets, the Group adopts the policy of dealing only with high credit quality counterparties.The Group has a credit risk policy in place to manage credit risk. All new customers are subject to credit worthinesscheck; counterparties are ranked and assigned a credit limit appropriately. Such credit limit would be approvedby a Risk Committee. In addition, any increase in credit limit requires approval from the Risk Committee. The RiskCommittee is mandated to monitor the payment ageing profi le of the third party receivables, review all the outstandingreceivables regularly and to identify any potential uncollectible for doubtful debts provision and/or write-off.As the Group does not hold any collateral, the maximum exposure to credit risk for each class of fi nancial instrumentsis the carrying amount of that class of fi nancial instruments presented on the balance sheet, except as follows:Company2010 2009US$’000US$’000Corporate guarantee provided to a bank on subsidiary’s borrowings 53,125 -The major trade receivables of the Group comprise of 1 debtor for 2010 (2009 : 1 debtor) represented 38% of tradereceivebles (2009 : 8%). The Company does not have trade receivables in 2010 and 2009.The credit risk for trade receivables based on the information provided to key management is as follows:Group2010 2009By geographical segment- AsiaUS$’000US$’000Malaysia 203,153 134,645Singapore 32,850 22,882Rest of Asia 23,725 59,740- Africa 62,913 38,059- Middle East 75,527 9,674- Europe 18,143 7,405- Pacifi c Oceania 3,146 4,096- America 7,652 3,173427,109 279,674

106MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201031. Financial risk management (continued)(b)Credit risk (continued)(i)Financial assets that are neither past due nor impairedBank deposits that are neither past due nor impaired are mainly deposits with banks of good credit-ratings.Trade receivables that are neither past due nor impaired are substantially companies with a good collectiontrack record with the Group and for which there is no historical track record of default.(ii)Financial assets that are past due and/or impairedThere is no other class of fi nancial assets that is past due and/or impaired except for trade receivables.The aged analysis of trade receivables past due but not impaired is as follows:Group2010 2009US$’000US$’0001 to 3 months 47,001 24,1483 to 6 months 1,196 2,7836 to 12 months 623 469Over 1 year - 1,54948,820 28,949The carrying amount of trade receivables individually determined to be impaired and the movement in therelated allowance for impairment are as follows:Group2010 2009US$’000US$’000Gross amount 16,391 18,102Less: Allowance for impairment (16,391) (18,102)- -Beginning of the fi nancial year (18,102) (17,471)Currency translation difference (2,316) (210)Allowance reversed & utilised/(made) 4,027 (421)End of the fi nancial year (16,391) (18,102)The impaired trade receivables arise mainly from sales to customers which are under fi nancial diffi culties.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010107Notes To The Financial StatementsFor the fi nancial year ended 31 December 201031. Financial risk management (continued)(c)Liquidity riskLiquidity risk is the risk that the Group will encounter diffi culty in meeting obligations due to shortage of funds. TheGroup maintains suffi cient liquidity by closely monitoring its cash fl ows. The Group adopts prudent liquidity riskmanagement policies in maintaining fl exibility in funding by keeping credit facilities available with different fi nancialinstitutions.The table below analyses the maturity profi le of the Group’s fi nancial liabilities (including derivative fi nancial liabilities)based on contractual undiscounted cash fl ows. Balances due within 12 months approximate their carrying balancesas the impact of discounting is not signifi cant.Between BetweenLess than 1 and 2 2 and 5 Over1 year years years 5 years TotalUS$’000 US$’000 US$’000 US$’000 US$’000GroupAt 31 December 2010Trade and other payables (302,680) - - - (302,680)Borrowings (310,119) (14,095) (5,436) - (329,650)Gross-settled currency forward contracts- Receipts 754,409 - - - 754,409- Payments (728,241) - - - (728,241)26,168 - - - 26,168Gross-settled futures contracts andforward sales and purchase contracts- Receipts 959,664 - - - 959,664- Payments (1,041,980) (39,478) - - (1,081,458)(82,316) (39,478) - - (121,794)At 31 December 2009Trade and other payables (202,704) - - - (202,704)Borrowings (210,565) (7,445) (7,747) - (225,757)Gross-settled currency forward contracts- Receipts 399,830 - - - 399,830- Payments (394,237) - - - (394,237)5,593 - - - 5,593Gross-settled futures contracts andforward sales and purchase contracts- Receipts 1,999,360 - - - 1,999,360- Payments (1,892,510) - - - (1,892,510)106,850 - - - 106,850

108MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201031. Financial risk management (continued)(c)Liquidity risk (continued)The Company’s fi nancial liabilities, based on contractual undiscounted cash fl ows, are due within 12 months andapproximate their carrying balances as the impact of discounting is not signifi cant.(d)Capital riskThe Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concernand to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve anoptimal capital structure over business cycles, the Group may adjust the amount of dividend payment, obtain newborrowings or sell assets to reduce borrowings.Management manages capital based on a number of key ratios including gross debt-equity ratio, net debt-equity ratioand adjusted net debt-equity ratio. The gross debt-equity ratio is defi ned as total interest bearing debts (“gross debt”)to total equity. Net debt-equity ratio is defi ned as total interest bearing debts less cash and cash equivalents (“netdebt”) to total equity. Adjusted debt-equity ratio is defi ned as net debt less readily marketable inventories (“adjustednet debt”) to total equity.Group2010 2009US$’000US$’000Gross debt 326,133 220,854Less: Cash and cash equivalents (215,322) (37,634)Net debt 110,811 183,220Less: Readily marketable inventories (179,637) (73,388)Adjusted net debt (68,826) 109,832Total equity 509,168 239,013Gross debt-equity ratio 0.64 0.92Net debt-equity ratio 0.22 0.77Adjusted net debt-equity ratio (0.14) 0.46The Group is in compliance with all externally imposed capital requirements for the fi nancial years ended 31 December2010 and 2009.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010109Notes To The Financial StatementsFor the fi nancial year ended 31 December 201031. Financial risk management (continued)(e)Fair value measurementsFair value measurements by level of the following fair value measurement hierarchy:(a)(b)quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); andinputs other than quoted prices included within Level 1 that are observable for the asset or liability, eitherdirectly (is as prices) or indirectly (i.e. derived from prices) (Level 2).The following table presents our fi nancial assets and liabilities measured at fair value as at balance sheetdate.Level 1 Level 2 TotalUS$’000 US$’000 US$’000Financial AssetsDerivative fi nancial instruments (Note 16)- Currency Forward contracts - 29,113 29,113- Commodities Futures contracts 30,743 - 30,743- Commodities Forward contracts - 31,626 31,626As at 31 December 2010 30,743 60,739 91,482Financial LiabilitiesDerivative fi nancial instruments (Note 16)- Commodities Forward contracts - 66,674 66,674As at 31 December 2010 - 66,674 66,674Financial AssetsDerivative fi nancial instruments (Note 16)- Currency Forward contracts - 6,135 6,135- Commodities Futures contracts 6,001 - 6,001- Commodities Forward contracts - 29,117 29,117As at 31 December 2009 6,001 35,252 41,253Financial LiabilitiesDerivative fi nancial instruments (Note 16)- Commodities Forward contracts - 13,624 13,624As at 31 December 2009 - 13,624 13,624The fair values of fi nancial instruments traded in active markets (such as exchange-traded and over-the-countersecurities and derivatives) are based on quoted market prices at the balance sheet date. The quoted marketprices used for fi nancial assets are the current bid prices; the appropriate quoted market prices for fi nancialliabilities are the current asking prices. These instruments are included in Level 1.

110MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201031. Financial risk management (continued)(e)Fair value measurements (continued)The fair values of fi nancial instruments that are not traded in an active market (such as commodities forward contracts)are determined by making references to the prices listed on the Malaysian Palm Oil Board, other similar products andother commodity exchanges, and makes assumptions that are based on market conditions existing at each balancesheet date. Where appropriate, quoted market prices or dealer quotes are used. The fair values of currency forwardcontracts are determined using quoted forward exchange rates at the balance sheet date. These instruments areincluded in Level 2.The carrying value less impairment provision of trade receivables and payables approximates their fair values. The fairvalue of fi nancial liabilities for disclosure purposes is estimated based on quoted market prices or dealer quotes forsimilar instruments by discounting the future contractual cash fl ows at the current market interest rate that is available tothe Group for similar fi nancial instruments. The fair value of current borrowings approximates their carrying amount.32. Related party transactionsIn addition to the information disclosed elsewhere in the consolidated fi nancial statements, the following transactions tookplace between the Group and related parties at terms agreed between the parties concerned.(a)Sales and purchases of goods and services and other transactionsGroup2010 2009US$’000US$’000Sales to related parties- Sales of fi nished goods 32,230 22,962Purchase from related parties- Purchases of raw materials (9,446) (6,266)Unrealised gain/(loss) from derivative fi nancial instruments 84 (564)Service rendered by related parties- Transportation and forwarding (2,359) (2,188)- Packing material (9,909) (8,684)- Insurance (3,195) (2,396)Rental paid/payable to related parties (112) (395)Service agreement - (82)Reimbursement of expenses for related parties 358 506Property, plant and equipment transferred (from)/to related parties- Sales/(purchases) of land - 4,779- Sales of spare parts, plant and machinery and motor vehicles - 1,620Related parties are companies in which the directors/shareholders of the Company have signifi cant infl uence or control.Outstanding balances at 31 December 2010 and 2009 arising from the above transactions are set out in Notes 14, 15, 21and 22 respectively.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010111Notes To The Financial StatementsFor the fi nancial year ended 31 December 201032. Related party transactions (continued)(b)Key management personnel compensationKey management personnel compensation is as follows:Group2010 2009US$’000US$’000Wages, salaries and other short-term employee benefi ts 8,788 5,327Employer’s contribution to defi ned contribution plans 89 848,877 5,41133. Segment informationManagement has determined the operating segments based on the reports reviewed by the Executive Committee thatare used to make strategic decisions. The Executive Committee comprises the Chief Executive Offi cer, the Chief FinancialOffi cer, and the department heads of each business within each business segment.The Executive Committee considers the business from two business segments:(i)(ii)The bulk business segment which sources, manufactures and sells edible oils and specialty fats and oils in bulk fora variety of end uses; andThe consumer pack goods segment which manufactures and sells edible oils and bakery fats to consumers inpackaged form.We measure and track our profi tability in terms of operating margin and EBITDA.Operating margin is calculated as revenue, less cost of sales (excluding depreciation), selling and distribution expensesand foreign exchange gain/(loss). Operating margin relating to inter-segment sales are reported under the segment wherethe fi nal sales to third parties are made.EBITDA is calculated as operating margin add other income (excluding interest income), less administrative expenses(excluding depreciation) and other operating expenses.In 2010, the Executive Committee has decided not to allocate current and deferred taxes to the respective businesssegment as tax planning is monitored at the Group level without prejudice between the segments. Accordingly, the segmentresult, segment assets and segment liabilities for the previous fi nancial year has been restated.

112MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201033. Segment information (continued)The segment information provided to the Executive Committee for the reportable segments for the year ended 31 December2010 is as follows:Bulk Consumer Pack TotalUS$’000 US$’000 US$’000GroupSalesTotal segment sales 3,051,237 1,030,969 4,082,206Inter-segment sales (493,257) (55,878) (549,135)Sales to external parties 2,557,980 975,091 3,533,071Operating margin 102,257 82,156 184,413Other income, excluding interest income 822 191 1,013Admin expenses, excluding depreciation (24,397) (27,654) (52,051)Other operating expenses (802) (256) (1,058)EBITDA 77,880 54,437 132,317Depreciation (9,619) (3,645) (13,264)Finance expense (6,567) (3,212) (9,779)Interest income 3,333 815 4,148Segment result 65,027 48,395 113,422UnallocatedPlacing and listing expenses (4,737)Income tax expense (16,248)Share of profi t of associate 3Profit after tax 92,440Total segment assets 790,687 431,817 1,222,504UnallocatedTax recoverable 5,847Investment in associate 86Goodwill 5,205Total assets 1,233,642Total assets include:Additions to:- property, plant and equipment 28,441 12,111 40,552Total segment liabilities (558,198) (137,289) (695,487)UnallocatedTax payable (13,534)Deferred tax liabilities (15,453)Total liabilities (724,474)

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010113Notes To The Financial StatementsFor the fi nancial year ended 31 December 201033. Segment information (continued)The segment information provided to the Executive Committee for the reportable segments for the year ended 31 December2009 is as follows:Bulk Consumer Pack TotalUS$’000 US$’000 US$’000GroupSalesTotal segment sales 2,458,491 793,954 3,252,445Inter-segment sales (330,479) (54,885) (385,364)Sales to external parties 2,128,012 739,069 2,867,081Operating margin 100,474 82,392 182,866Other income, excluding interest income 770 504 1,274Admin expenses, excluding depreciation (25,168) (25,795) (50,963)Other operating expenses (1,309) (455) (1,764)EBITDA 74,767 56,646 131,413Depreciation (7,604) (3,265) (10,869)Finance expense (3,950) (2,371) (6,321)Interest income 2,493 408 2,901Segment result 65,706 51,418 117,124UnallocatedIncome tax expense (27,449)Profit after tax 89,675Total segment assets 508,421 196,604 705,025UnallocatedTax recoverable 413Total assets 705,438Total assets includes:Additions to:- property, plant and equipment 18,511 2,748 21,259Total segment liabilities (340,122) (97,060) (437,182)UnallocatedTax payable (5,065)Deferred tax liabilities (24,178)Total liabilities (466,425)

114MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201033. Segment information (continued)Geographical informationRevenues are attributed to countries on the basis of the customers billing location. The non-current assets are analysed bythe geographical area in which the non-current assets are located.Group2010 2009Revenue by geographyUS$’000US$’000Malaysia 1,597,708 1,177,626Singapore 335,871 394,951Other countries1,933,579 1,572,577- Rest of Asia 371,112 442,260- Africa 556,833 311,742- Middle East 391,226 341,341- Europe 136,794 97,877- Pacifi c Oceania 56,070 58,388- America 87,457 42,8961,599,492 1,294,5043,533,071 2,867,081Non-current assets by geographySingapore 11,987 10,832Malaysia 205,019 161,839Other countries 927 678217,933 173,349Approximately 21% of the Group’s total revenue for the fi nancial year ended 31 December 2010 is derived from a singleexternal customer (2009: 6%). These revenues are attributable to revenue from Malaysia.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010115Notes To The Financial StatementsFor the fi nancial year ended 31 December 201034. Significant business combinations(a)Business combinations under common controlNgo Chew Hong Corporation Pte Ltd (“NCHC”), a subsidiary of the Company entered into a Sale and Purchaseagreement with Cheo Holdings Pte. Ltd. (formerly known as Ngo Chew Hong (Holdings) Pte. Ltd.) on 30 September2010 to acquire Ngo Chew Hong Edible Oil Pte Ltd (“NCHEO”) for a purchase consideration of approximatelyUS$11,794,000.NCHC also entered into a Sale and Purchase agreement with Cheo Holdings Pte. Ltd. (formerly known as NgoChew Hong (Holdings) Pte. Ltd.) on 30 December 2010 to acquire Ngo Chew Hong Investment Pte Ltd (“NCHINV”)and Ngo Chew Hong Industries Pte Ltd (“NCHIND”) respectivity for a purchase consideration of approximatelyUS$299,000 and US$108,000 respectively.Hua Guan Inc and Hua Guan Oleo (S) Pte Ltd, subsidiaries of the Company on 16 August 2010 acquired 10%and 90% equity interest of Mewah Oils India Pvt Ltd (“Mewah India”) respectively for a purchase consideration ofapproximately US$282,000.The controlling parties of NCHEO, NCHINV, NCHIND and Mewah India are Dr Cheo Tong Choon @ Lee Tong Choon,Cheo Seng Jin, Cheo Su Ching, Ong Tuan Hong, Cheo Tiong Heng, Cheo Teong Eng, Cheo Soh Hua, Cheo SorCheng, Cheo Tiong Choon and Cheo Chong Cher, which are also the controlling parties of the Company.This acquisition is accounted for under common control have been accounted for using the pooling-of-interestmethod, as disclosed in 2.3(a)(ii) to the fi nancial statements.

116MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201034. Significant business combinations (continued)(a)Business combinations under common control (continued)The comparative fi gures have been revised as if the combination has occurred from the date when the combiningentities fi rst came under common control.The effects of the business combination on the comparative information presented are as follows:Balance sheetThe effects as at 31 December 2009:US$’000Total assets 1,913Total liabilities (1,335)Retained earnings (377)Merger reserve (192)Translation reserve (9)The effects as at 1 January 2009:US$’000Total assets 7,367Total liabilities (1,167)Retained earnings (5,999)Merger reserve (192)Translation reserve (9)Consolidated income statementThe effects for the period ended 31 December 2009:US$’000Total profi t after tax 46

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010117Notes To The Financial StatementsFor the fi nancial year ended 31 December 201034. Significant business combinations (continued)(b)Business combinations under “acquisition method”On 27 December, 2010, the Group completed the acquisition of 52.0% of the issued equity of Molly Foods bvba(“Molly Foods”), a company incorporated in Belgium which, through its wholly owned subsidiary, Bloom LandEnterprises Limited (“Bloom Land”), a company incorporated in Hong Kong, owns 100% of BeCe S.à.r.l. (“BeCe”),a company incorporated in Togo, involved primarily in importing commodities, including edible oils and fats productsproduced by the Group, for sale in West Africa.The effects of the acquisition are as follows:US$’000(i)Purchase considerationTotal purchase consideration 6,202(ii)Effect on cash flows of the GroupCash paid (as above) (6,202)Less: Cash and cash equivalents in subsidiaries acquired 9,806Cash inflow on acquisition 3,604(iii)Identifiable assets acquired and liabilities assumedAt fair valueUS$’000Cash and cash equivalents 9,806Property, plant and equipment (Note 18) 123Inventories 23,919Trade and other receivables (Note (iv) below) 1,498Total assets 35,346Trade and other payables (31,677)Borrowings (1,404)Current tax liabilities (348)Total liabilities (33,429)Total identifiable net assets 1,917Less: Non-controlling interests at fair value (Note (v) below) (920)Add: Goodwill (Note 20) 5,205Consideration transferred for the business 6,202

118MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201034. Significant business combinations (continued)(b)Business combinations under “acquisition method” (continued)(iv)Acquired receivablesThe fair value of trade and other receivables is US$1,498,000 and includes trade receivables with a fair valueof US$752,000.(v)Non-controlling interestsThe Group has recognised the 48.0% non-controlling interests of US$920,000.(vi)Revenue and profit contributionAs the subsidiaries are acquired at year-end, there is no contribution of revenue and net profi t to the Group forthe year ended 31 December 2010.Had Molly Foods, Bloom Land and BeCe been consolidated from 1 January 2010, consolidated revenueand consolidated profi t for the year ended 31 December 2010 would have higher by US$10,438,000 andUS$1,141,000 respectively.35. Events occurring after balance sheet dateOn 24 January 2011, the Group has signed an investment agreement with Jiangsu Zhangjiagang Free Trade Zone ForeignInvestment Bureau to increase the scale of an earlier investment signed on 18 September 2009. Under the new agreement,the Group plans to acquire additional land use rights of approximately 307 mu (approximately 2.2 million sq. ft.) and increasethe investment by additional US$200 million. The project is estimated to be completed in 3 years and the investment isplanned to be funded by the combination of net proceeds from the Listing of the Company and internal funds as well asexternal debts.On 25 January 2011, the Group has accepted an offer of 6 pieces of industrial land (the “land”) in Malaysia (the “Purchase”).The land has a total site area of 31.39 acres and will be utilized for future expansion purposes. The purchase considerationis approximately MYR26.66 million and will be funded by net proceeds from the Listing of the Company.On 25 January 2011, the Company’s wholly-owned subsidiary, Pandan Loop International Inc., through its wholly-ownedsubsidiary Ngo Chew Hong Oleo (S) Pte Ltd, has incorporated a company in the People’s Republic of China, Mewah Oils(Tianjin) Co., Ltd.. The registered share capital of Mewah Oils (Tianjin) Co., Ltd. is US$20 million.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010119Notes To The Financial StatementsFor the fi nancial year ended 31 December 201036. New or revised accounting standards and interpretationsBelow are the mandatory standards, amendments and interpretations to existing standards that have been published, andare relevant for the Group’s accounting periods beginning on or after 1 January 2011 or later periods and which the Grouphas not early adopted:• Amendments to FRS 24 - Related party disclosures (effective for annual periods beginning on or after 1 January2011)• Amendments to FRS 32 Financial Instruments: Presentation - Classifi cation of rights issues (effective for annualperiods beginning on or after 1 February 2010)• Amendments to INT FRS 114 - Prepayments of a minimum funding requirement (effective for annual periodscommencing on or after 1 January 2011)• INT FRS 119 Extinguishing fi nancial liabilities with equity instruments (effective for annual periods commencing on orafter 1 July 2010)The management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRS in the future periodswill not have a material impact on the fi nancial statements of the Group and of the Company in the period of their initialadoption.37. Authorisation of consolidated financial statementsThese consolidated fi nancial statements were authorised for issue in accordance with a resolution of the Board of Directorsof Mewah International Inc. on 22 March 2011.38. Listing of companies in the GroupName of companiesDirectly held by the CompanyCountry ofincorporationPrincipalactivitiesPrincipal countryof operationEquityholding2010 2009% %One Marthoma (CI) Inc. (k) Cayman Islands Investment holding Cayman Islands 100 100Subsidiaries of One Marthorma (CI) Inc.Mewah Oleo Malaysia Sdn Bhd (b) Malaysia Investment holding Malaysia 100 100Ngo Chew Hong Corporation Pte Ltd (a) Singapore Investment holding Singapore 100 100Padat Gaya Sdn Bhd (c) Malaysia Investment holding Malaysia 100 100MOI Foods (Shanghai) Co. Ltd. (i)(Held by Ngo Chew Hong Oleo (S) Pte Ltd asat 31 December 2010)People’sRepublic ofChinaTradingPeople’sRepublic ofChina- 100MOI International (Australia) Pty Ltd (e) Australia Trading Australia 83.4 75

120MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201038. Listing of companies in the Group (continued)Name of companiesSubsidiaries of Mewah Oleo Malaysia Sdn BhdCountry ofincorporationPrincipalactivitiesMewah-Oils Sdn Bhd (b) Malaysia Manufacturing andtrading of palm oilproductsNgo Chew Hong Oils & Fats (M) Sdn Bhd (d) Malaysia Refi ning andtrading of palm oilproductsMoi Foods Malaysia Sdn Bhd (d) Malaysia Manufacturingand trading ofdownstream palmoil productsContainer Fabricator (M) Sdn Bhd (d) Malaysia Manufacturing ofplastic containersMewaholeo Marketing Sdn Bhd (b) Malaysia Trading of palm oiland palm oil relatedproductsPrincipal countryof operationEquityholding2010 2009% %Malaysia 100 100Malaysia 100 100Malaysia 100 100Malaysia 100 100Malaysia 100 100Batam Heights Sdn Bhd (d) Malaysia Dormant Malaysia 100 100G & U Districenters (M) Sdn Bhd (d) Malaysia Dormant Malaysia 100 100Nilam Tekad Sdn Bhd (d) Malaysia Dormant Malaysia 100 100Bremfi eld Sdn Bhd (d) Malaysia Dormant Malaysia 100 100Associate of Mewah Oleo Malaysia Sdn BhdPrelude Gateway Sdn Bhd (l) Malaysia Freight forwarding,transportation,warehousing andlogistical servicesSubsidiaries of Ngo Chew Hong CorporationPte LtdMewah Oils & Fats Pte Ltd (a) Singapore Trading ofedible oils andproviding commoditybrokerage serviceNgo Chew Hong Edible Oil Pte Ltd (a) Singapore Packagingand trading of edible oilMOI International (Singapore) Pte Ltd (a) Singapore Trading ofedible oil productsMewah Brands (S) Pte Ltd (a) Singapore To own brandsused by relatedparties and groupcorporationsMalaysia 49 -Singapore 100 100Singapore 100 99Singapore 100 100Singapore 100 100

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010121Notes To The Financial StatementsFor the fi nancial year ended 31 December 201038. Listing of companies in the Group (continued)Name of companiesSubsidiaries of Ngo Chew Hong CorporationPte Ltd (continued)Moi Foods Romania S.R.L. (k)(formerly known as Krispi Oils Romania S.R.L.)Country ofincorporationPrincipalactivitiesPrincipal countryof operationEquityholding2010 2009% %Romania Trading Romania 100 100Ngo Chew Hong Industries Pte Ltd (f) Singapore Investment holding Singapore 100 100Ngo Chew Hong Investment Pte. Ltd. (f) Singapore Dealing in share,securities andcommoditiesMewah Commodities Pte Ltd (a) Singapore Trading ofedible oils and fatsin commodity andinvestment holdingKrispi Oil and Food Products Marketing,Import, Export Trading Company (Turkey) (k)(50% equity held by Mewah CommoditiesPte Ltd and 50% equity held by Ngo ChewHong Corporation Pte Ltd)Subsidiaries of Mewah Commodities Pte LtdSingapore 100 100Singapore 100 100Turkey Trading Turkey 100 -Krispi Oil Russia LLC (k) Russia Trading Russia 100 -Krispi Oils Poland Sp. z.o.o (k)(90% equity held by Mewah CommoditiesPte Ltd and 10% equity held by Ngo ChewHong Corporation Pte Ltd)Moi Foods Belgium N.V. (k)(90% equity held by Mewah CommoditiesPte Ltd and 10% equity held by Ngo ChewHong Corporation Pte Ltd)Poland Trading Poland 100 -Belgium Investment holding Belgium 100 -Subsidiary of Moi Foods Belgium N.V.Molly Foods bvba (k) Belgium Trading andinvestment holdingSubsidiary of Molly Foods bvbaBloom Land Enterprises Limited (g) Hong Kong Providingcommoditybrokerage serviceBelgium 52 -Hong Kong 52 -Subsidiary of Bloom Land Enterprises LimitedBeCe S.à.r.l. (h) Togo Trading Togo 52 -

122MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notes To The Financial StatementsFor the fi nancial year ended 31 December 201038. Listing of companies in the Group (continued)Name of companiesSubsidiaries of Padat Gaya Sdn BhdMewaholeo Industries Sdn Bhd (c) Malaysia Refi ning andtrading of palm oilproductsMalaysia 100 100Mewah Datu Sdn Bhd (c)Malaysia Inactive Malaysia 100 100(formerly known as Mewah-Oils Sabah Sdn Bhd)Subsidiary of MOI (International) Australia Pty LtdFrycycle Pty Ltd (e) Australia Dormant Australia 83.4 75Directly held by the CompanyPandan Loop International Inc. (k)Cayman Islands Investment holding Cayman Islands 100 100(formerly known as Futura Twenty Four- Eighteen Inc.)Subsidiaries of Pandan Loop International Inc.Ngo Chew Hong Oleo (S) Pte Ltd (a) Singapore Dormant Singapore 100 100PT Seengatta Palm (k) Indonesia Dormant Indonesia 95 -Subsidiaries of Ngo Chew Hong Oleo (S) Pte LtdMOI Foods (Shanghai) Co. Ltd. (i)People’sRepublic ofChinaTrading People’sRepublic ofChina100 -Mewah Oils (ZJG) Co. Ltd. (j)Hua Guan Oleo (S) Pte Ltd (a)(Held by Hua Guan Inc. as at 31 December 2010)Directly held by the CompanyCavenagh House International Inc. (k)Subsidiaries of Cavenagh House International Inc.Country ofincorporationPeople’sRepublic ofChinaTradingPeople’sRepublic ofChina100 -Singapore Investment holding Singapore - 100CaymanIslandsPrincipalactivitiesInvestmentholdingCavenagh Oleo (S) Pte Ltd (a) Singapore InvestmentholdingPrincipal countryof operationEquityholding2010 2009% %Singapore 100 100Singapore 100 100PT Utara Agro (k) Indonesia Dormant Indonesia 95 95PT Agro Murni (k)(Held by Cavenagh Oleo (S) Pte Ltd as at31 December 2010)PT Timuran Agro (k)(Held by Cavenagh Oleo (S) Pte Ltd as at31 December 2010)Indonesia Dormant Indonesia - 95Indonesia Dormant Indonesia - 95

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010123Notes To The Financial StatementsFor the fi nancial year ended 31 December 201038. Listing of companies in the Group (continued)Name of companiesSubsidiaries of Cavenagh Oleo (S) Pte LtdPT Agro Murni (k) Indonesia Dormant Indonesia 95 -PT Timuran Agro (k) Indonesia Dormant Indonesia 95 -Directly held by the CompanyHua Guan Inc. (k)Subsidiary of Hua Guan Inc.British VirginIslandsInvestmentholdingHua Guan Oleo (S) Pte Ltd (a) Singapore InvestmentholdingSubsidiary of Hua Guan Oleo (S) Pte LtdCountry ofincorporationPrincipalactivitiesPrincipal countryof operationEquityholding2010 2009% %Cayman Islands 100 100Singapore 100 -Mewah Oils India Pvt Ltd (k)(90% equity held by Hua Guan Oleo (S) PteLtd and 10% equity held by Hua Guan Inc.)India Trading India 100 100Directly held by the CompanyMoi International Inc. (k) Mauritius Dormant Mauritius 100 100(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l)Audited by PricewaterhouseCoopers LLP, SingaporeAudited by PricewaterhouseCoopers, Kuala LumpurAudited by PricewaterhouseCoopers, Johor BahruAudited by KPMG, Kuala LumpurAudited by BDO Kendalls (QLD) Pty Ltd, AustraliaAudited by RSM Chio Lim LLP, SingaporeAudited by Yeung, Chan & Associate CPA Limited, Hong KongAudited by Tog’Audit Consulting SARL, TogoAudited by Shanghai Shen Zhou Da Tong Certified Public Accountants Company Limited, People’s Republic ofChinaAudited by Suzhou Qinye Union Certified Public Accountants, People’s Republic of ChinaNot required to be audited under the laws of the country of incorporationAudited by HALS & Associates, Malaysia

124MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010IPO Proceeds and Material ContractUse of Proceeds from Initial Public Offering (“IPO”)The net IPO proceeds (after deducting expenses for professional fees, underwriting and placement commissions and othertransaction expenses related to the IPO amounting to approximately S$10.1 million) are approximately S$238.6 million.As at 31 December 2010, S$50.0 million, S$8.0 million and S$5.3 million (totaling S$63.3 million), have been used for workingcapital purposes, acquisition of investment in Molly Foods BVBA and Sabah Refi nery Project respectively. The use of proceedsis in accordance with the intended use of net IPO proceeds as described in the Prospectus dated 16th November 2010.Material ContractsThere was no material contracts entered into by the Company or any of its subsidiaries involving the interest of the ChiefExecutive Offi cer, any Director, or controlling shareholder subsisting at the end of fi nancial year ended 31 December 2010.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010125Statistics of ShareHoldingsas at 18 March 2011Total Number of Issued Shares : 1,507,061,440Issued and Fully Paid-up Capital : US$1,507,061Class of SharesVoting Rights: Ordinary shares: One vote per ShareDistribution of ShareholdingsSize of Shareholdings Number of Shareholders % Number of shares %1 – 999 Nil Nil Nil Nil1,000 – 10,000 3,247 82.31 10,652,299 0.7110,001 – 1,000,000 673 17.06 46,287,501 3.071,000,001 & above 25 0.63 1,450,121,640 96.223,945 100.00 1,507,061,440 100.00Substantial ShareholdersDirect InterestDeemed InterestNameNo. of shares % No. of shares %Dr Cheo Tong Choon @ Lee Tong Choon 8,871,000 0.59 527,041,220(1) 34.97Ms Michelle Cheo Hui Ning - - 527,041,220(1) 34.97Ms Bianca Cheo Hui Hsin - - 527,041,220(1) 34.97Mr Cheo Seng Jin 123,950,000 8.22 - -Eighteen Tenth Nineteen Forty Four Inc. 527,041,220 34.97 - -Ms Sara Cheo Hui Yi - - 527,041,220(1) 34.97Mr Cheo Jian Jia - - 527,041,220(1) 34.97Mr Cheo Tiong Heng @ Lee Tiong Heng 103,630,000 6.88 - -Mr Cheo Tiong Choon 115,595,000 7.67 - -Mdm Ong Tuan Hong 82,351,220 5.46 - -Ms Cheo Soh Hua @ Lee Soh Hua 57,035,000 3.78 - -Mr Cheo Teong Eng 38,430,000 2.55 - -Ms Cheo Su Ching 50,020,000 3.32 - -Ms Cheo Chong Cher 35,990,000 2.39 - -Ms Cheo Sor Cheng Angeline 28,060,000 1.86 - -Ms Chung Amy 39,772,000 2.64 - -Mr Cheo Ming Xiang - - 39,772,000(2) 2.64Ms Pearl Cheo - - 39,772,000(2) 2.64Mr Cheo Ming You 34,800,500 2.31 - -Mr Cheo Ming Shen 24,857,500 1.65 - -Total 1,270,403,440 84.29

126MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Statistics of ShareHoldingsas at 18 March 2011Substantial Shareholders (continued)(1) The shareholders of Eighteen Tenth Nineteen Forty Four Inc. are Dr T.C. Pierre (Cayman Islands) Inc. (64.1%),Mr Cheo Seng Jin (20.4%),Mr Cheo Tiong Choon(5.1%),Mr Cheo Teong Eng (2.6%),Ms Cheo Su Ching (2.6%), Ms Cheo Chong Cher (2.6%) and Ms Cheo Sor Cheng Angeline (2.6%), interest respectively, inthe share capital of Eighteen Tenth Nineteen Forty Four Inc. The directors of Eighteen Tenth Nineteen Forty Four Inc. are Ms Michelle Cheo Hui Ning,Ms BiancaCheo Hui Hsin and Ms Leong Choi Foong. Dr T.C. Pierre (Cayman Islands) Inc., is deemed interested in the shares held by Eighteen Tenth Nineteen Forty FourInc. in our Company by virtue of Section 4(5) of the SFA as a result of holding 64.1% shares in Eighteen Tenth Nineteen Forty Four Inc. Dr T.C. Pierre (CaymanIslands) Inc. is wholly owned by SG Hambros Trust Company (Channel Islands) Limited as trustee of the Peter Strong Spring M.D. Trust, which holds Dr T.C.Pierre (Cayman Islands) Inc.’s interest in Eighteen Tenth Nineteen Forty Four Inc. for its benefi ciaries, Ms Michelle Cheo Hui Ning,Ms Bianca Cheo Hui Hsin,MsSara Cheo Hui Yi and Mr Cheo Jian Jia. The benefi cial interests of Ms Michelle Cheo Hui Ning,Ms Bianca Cheo Hui Hsin,Ms Sara Cheo Hui Yi and Mr CheoJian Jia under the Peter Strong Spring MD Trust are 18.0%, 18.0%, 18.0% and 46.0%, respectively. As a result of their benefi cial interests in the Peter StrongSpring M.D. Trust, Ms Michelle Cheo Hui Ning, Ms Bianca Cheo Hui Hsin, Ms Sara Cheo Hui Yi and Mr Cheo Jian Jia are deemed interested in the Sharesheld by Eighteen Tenth Nineteen Forty Four Inc. in our Company by virtue of Section 4(3) of the SFA. The Peter Strong Spring MD Trust is a discretionary trustand the settlor of the trust is our Executive Chairman, Dr Cheo Tong Choon @ Lee Tong Choon.(2) Ms Chung Amy holds her Shares in our Company on trust for Mr Cheo Ming Xiang and Ms Pearl Cheo, who as a result of their benefi cial interests in the Sharesin our Company held by Ms Chung Amy, are deemed interested in the Shares in our Company held by Ms Chung Amy, by virtue of Section 4(3) of the SFA.Twenty Largest ShareholdersName Number of shares %1. UOB Kay Hian Pte Ltd 537,490,220 35.662. HSBC (Singapore) Nominees Pte Ltd 364,273,000 24.173. Cheo Seng Jin 122,000,000 8.104. Cheo Tiong Heng @ Lee Tiong Heng 103,630,000 6.885. Ong Tuan Hong 82,351,220 5.466. Chung Amy 39,772,000 2.647. Cheo Ming You 34,800,500 2.318. Raffl es Nominees (Pte) Ltd 28,075,000 1.869. Citibank Nominees Singapore Pte Ltd 26,384,334 1.7510. Cheo Ming Shen 24,857,500 1.6511. DBS Nominees Pte Ltd 13,985,866 0.9312. Tsao Chin Mey Jimmy 11,891,000 0.7913. United Overseas Bank Nominees Pte Ltd 11,542,000 0.7714. Swordfi sh Investments Pte Ltd 10,605,000 0.7015. BNP Paribas Nominees Singapore Pte Ltd 8,671,000 0.5816. Toh Soo Meng 6,823,000 0.4517. Low Tuck Kwong 5,000,000 0.3318. CIMB Securities (Singapore) Pte Ltd 3,797,000 0.2519. DBSN Services Pte Ltd 3,600,000 0.2420. Tsao Yue Hwa Johnny @ Shu Yue Ming 3,000,000 0.20Total 1,442,548,640 95.72Shareholding Held by the PublicBased on the information available to the Company as at 18 March 2011, approximately 15.71% of the issued shares of theCompany is held by the public. Accordingly, the Company has complied with the Rules 1207 and 723 of the Listing Manual ofthe Singapore Exchange Securities Trading Limited.

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010127Notice of Annual General MeetingNOTICE IS HEREBY GIVEN that the Annual General Meeting of MEWAH INTERNATIONAL INC. (“Company”) will be held atJurong Country Club, 9 Science Centre Road, Singapore 609078 on Monday, 25 April 2011 at 10.00 a.m. for the followingpurposes:AS ORDINARY BUSINESS1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company and its subsidiaries for the fi nancialyear ended 31 December 2010 together with the Auditors’ Report thereon.(Resolution 1)2. To re-elect Dr Cheo Tong Choon @ Lee Tong Choon, a Director retiring pursuant to Article 85(6) of the Company’s Articlesof Association. [See Explanatory Note (i)](Resolution 2)3. To note the retirement of Mr Cheo Seng Jin, a Director retiring pursuant to Article 85(6) of the Company’s Articles ofAssociation, who will not be seeking re-election.4. To re-elect Ms Michelle Cheo Hui Ning, a Director retiring pursuant to Article 85(6) of the Company’s Articles of Association.(Resolution 3)5. To re-elect Ms Bianca Cheo Hui Hsin, a Director retiring pursuant to Article 85(6) of the Company’s Articles of Association.(Resolution 4)6. To re-elect Ms Wong Lai Wan, a Director retiring pursuant to Article 85(6) of the Company’s Articles of Association.(Resolution 5)7. To re-elect Ms Leong Choi Foong, a Director retiring pursuant to Article 85(6) of the Company’s Articles of Association.(Resolution 6)8. To re-elect Mr Giam Chin Toon, a Director retiring pursuant to Article 85(6) of the Company’s Articles of Association.[See Explanatory Note (ii)](Resolution 7)9. To re-elect Tan Sri Dato’ Ir Muhammad Radzi bin Hj Mansor, a Director retiring pursuant to Article 85(6) of the Company’sArticles of Association. [See Explanatory Note (iii)](Resolution 8)10. To re-elect Mr Lim How Teck, a Director retiring pursuant to Article 85(6) of the Company’s Articles of Association.[See Explanatory Note (iv)](Resolution 9)11. To re-elect Tan Sri Datuk Dr Ong Soon Hock, a Director retiring pursuant to Article 85(6) of the Company’s Articles ofAssociation. [See Explanatory Note (v)](Resolution 10)12. To approve the payment of Directors’ Fees of S$20,614 for the fi nancial year ended 31 December 2010.(Resolution 11)13 To approve the payment of Directors’ Fees of S$198,000 for the fi nancial year ending 31 December 2011, to be paid at theend of each quarter during the fi nancial year.(Resolution 12)

128MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notice of Annual General Meeting14. To re-appoint Messrs PricewaterhouseCoopers as the Company’s Auditors and to authorise the Directors to fi x their remuneration.(Resolution 13)15. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.(Resolution 14)AS SPECIAL BUSINESSTo consider and, if thought fi t, to pass the following resolutions as Ordinary Resolutions, with or without modifi cations:16. “That pursuant to Rule 806 of the listing rules of the Singapore Exchange Securities Trading Limited (“SGX-ST”), authoritybe and is hereby given to the Directors of the Company to:1. (i) issue shares in the capital of the Company (the “Shares”) (whether by way of rights, bonus or otherwise); and/or(ii)make or grant offers, agreements or options that may or would require Shares to be issued, including butnot limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instrumentsconvertible into Shares (collectively, the “Instruments”),2. (notwithstanding that the authority conferred by paragraph 1 of this resolution may have ceased to be in force) issueShares in pursuance of any Instrument made or granted by the Directors while this resolution was in force,at any time and from time to time upon such terms and conditions, whether for cash or otherwise, and for such purposesand to such persons as the Directors may think fi t for the benefi t of the Company, provided that:a. the aggregate number of Shares to be issued pursuant to this resolution (including shares to be issued in pursuanceof Instruments made or granted pursuant to this resolution) does not exceed fi fty per cent. (50%) of the total numberof issued Shares excluding treasury shares of the Company (as calculated in accordance with sub-paragraph b.below), of which the aggregate number of Shares to be offered other than on a pro-rata basis to shareholders of theCompany (including Shares to be issued in pursuance of Instruments made or granted pursuant to this resolution)does not exceed twenty per cent. (20%) of the total number of issued Shares excluding treasury shares of theCompany (as calculated in accordance with sub-paragraph b. below);b. for the purpose of determining the aggregate number of Shares that may be issued under sub-paragraph a. above,the percentage of the total number of issued Shares excluding treasury shares shall be calculated based on the totalnumber of issued Shares excluding treasury shares of the Company at the time of the passing of this resolution, afteradjusting for:(i)(ii)(iii)new Shares arising from the conversion or exercise of any convertible securities;new Shares arising from exercise of share options or vesting of share awards outstanding or subsisting at thetime of the passing of this resolution, provided the options or awards were granted in compliance with PartVIII of Chapter 8 of the Listing Manual of the SGX-ST; andany subsequent bonus issue, consolidation or subdivision of Shares;c. in exercising the authority conferred by this resolution, the Company shall comply with the provisions of the ListingManual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and thememorandum of association and Bye-laws for the time being of the Company; and

MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010129Notice of Annual General Meetingd. unless revoked or varied by the Company in general meeting, the authority conferred by this resolution shall continuein force until the conclusion of the next annual general meeting of the Company or the date by which the next annualgeneral meeting of the Company is required to be held, whichever is the earlier, except that the Directors shall beauthorised to allot and issue Shares pursuant to any Instrument made or granted by the Directors while this resolutionwas in force notwithstanding that such authority has ceased to be in force at the time of issue of such Shares.” [SeeExplanatory Note (vi)].(Resolution 15)17. “That for the purposes of Chapter 9 of the Listing Manual (“Chapter 9”) of the SGX-ST:(1) approval be and is hereby given for the Company, its subsidiaries and associated companies that are consideredto be “entities at risk” under Chapter 9, or any of them, to enter into any of the transactions falling within the typesof interested person transactions described in the Appendix to the Annual Report for the fi nancial year 2010 (the“Appendix”) with any party who is of the class of interested persons described in the Appendix, provided thatsuch transactions are made on normal commercial terms and in accordance with the review procedures for suchinterested person transactions (the “Mandate”);(2) the approval given in paragraph (1) above shall, unless revoked or varied by the Company in general meeting,continue in force until the conclusion of the next Annual General Meeting of the Company; and(3) the Directors of the Company be and are hereby authorised to complete and do all such acts and things (includingexecuting all such documents as may be required) as they may consider expedient or necessary or in the interestsof the Company to give effect to the Mandate and/or this Resolution.” [See Explanatory Note (vii)].(Resolution 16)By Order of the BoardAbdul Jabbar Bin Karam DinCompany SecretarySingapore, 8 April 2011

130MEWAH INTERNATIONAL INC.ANNUAL REPORT 2010Notice of Annual General MeetingExplanatory Notes:(i)(ii)(iii)(iv)(v)(vi)(vii)Dr Cheo Tong Choon @Lee Tong Choon, upon re-election as a Director of the Company, will remain as a member of theNominating Committee. Dr Cheo Tong Choon @Lee Tong Choon is the Chairman and Executive Director.Mr Giam Chin Toon, upon re-election as a Director of the Company, will remain as the Chairman of the Remuneration andNominating Committees and a member of the Audit Committee. Mr Giam Chin Toon is the Lead Independent Director.Tan Sri Dato’ Ir Muhammad Radzi bin Hj Mansor, upon re-election as a Director of the Company, will remain as a memberof the Audit Committee, Remuneration Committee and Nominating Committee. Tan Sri Dato’ Ir Muhammad Radzi bin HjMansor is an Independent Director.Mr Lim How Teck, upon re-election as a Director of the Company, will remain as the Chairman of the Audit Committee anda member of the Remuneration Committee and Nominating Committee. Mr Lim How Teck is an Independent Director.Tan Sri Datuk Dr Ong Soon Hock, upon re-election as a Director of the Company, will remain as a member of the NominatingCommittee. Tan Sri Datuk Dr Ong Soon Hock is an Independent Director.The Ordinary Resolution 15 proposed in item 16. above, if passed, is to empower the Directors to issue shares in thecapital of the Company and/or instruments (as defi ned above). The aggregate number of shares to be issued pursuantto Resolution 15 (including shares to be issued in pursuance of instruments made or granted) shall not exceed fi fty percent. (50%) of the total number of issued shares excluding treasury shares of the Company, with a sub-limit of twenty percent. (20%) for shares issued other than on a pro-rata basis (including shares to be issued in pursuance of instrumentsmade or granted pursuant to this Resolution) to shareholders with registered addresses in Singapore. For the purposeof determining the aggregate number of shares that may be issued, the percentage of the total number of issued sharesexcluding treasury shares of the Company will be calculated based on the total number of issued shares excluding treasuryshares of the Company at the time of the passing of Resolution 15, after adjusting for (i) new shares arising from theconversion or exercise of any convertible securities; (ii) new shares arising from exercise of share options or vesting ofshare awards outstanding or subsisting at the time of the passing of Resolution 15, provided the options or awards weregranted in compliance with Part VIII of Chapter 8 of the Listing Manual of the SGX-ST; and (iii) any subsequent bonus issue,consolidation or subdivision of shares.The Ordinary Resolution 16 proposed in item 17. above, if passed, is to empower the Directors of the Company to continueto enter into interested person transactions, on the Group’s normal commercial terms and in accordance with the guidelinesand procedures of the Company for interested person transactions as described in the Appendix to Shareholders dated 8April 2011. This authority will continue in force until the next Annual General Meeting.Notes:1. If a shareholder being a Depositor whose name appears in the Depository Register (as defi ned in Section 130A of theCompanies Act, Cap. 50 of Singapore) wishes to attend and vote at the Annual General Meeting, then he/she shouldcomplete the Proxy Form and deposit the duly completed Proxy Form at the offi ce of the Singapore Share TransferAgent, Boardroom Corporate & Advisory Services Pte. Ltd., at 50 Raffl es Place, Singapore Land Tower, #32-01 Singapore048623, at least 48 hours before the time of the Annual General Meeting.2. If a Depositor wishes to appoint a proxy/proxies, then the Proxy Form must be deposited at the offi ce of the SingaporeShare Transfer Agent, Boardroom Corporate & Advisory Services Pte. Ltd., at 50 Raffl es Place, Singapore Land Tower,#32-01 Singapore 048623, at least 48 hours before the time of the Annual General Meeting.

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CorporateInformationDirectorsDr Cheo Tong Choon @ Lee Tong Choon (Chairman andExecutive Director)Ms Michelle Cheo Hui Ning (Executive Director)Ms Bianca Cheo Hui Hsin (Executive Director)Mr Cheo Seng Jin (Executive Director)Ms Leong Choi Foong (Executive Director)Ms Wong Lai Wan (Executive Director)Mr Giam Chin Toon (Lead Independent Director)Tan Sri Dato’ Ir. Muhammad Radzi Bin Haji Mansor(Independent Director)Mr Lim How Teck (Independent Director)Tan Sri Datuk Dr Ong Soon Hock (Independent Director)Audit CommitteeMr Lim How Teck (Chairman)Tan Sri Dato’ Ir. Muhammad Radzi Bin Haji MansorMr Giam Chin ToonNominating CommitteeMr Giam Chin Toon (Chairman)Tan Sri Datuk Dr Ong Soon HockTan Sri Dato’ Ir. Muhammad Radzi Bin Haji MansorMr Lim How TeckDr Cheo Tong Choon @ Lee Tong ChoonRemuneration CommitteeMr Giam Chin Toon (Chairman)Tan Sri Dato’ Ir. Muhammad Radzi Bin Haji MansorMr Lim How TeckExecutive OfficersDr Cheo Tong Choon @ Lee Tong ChoonMs Michelle Cheo Hui NingMs Bianca Cheo Hui HsinMr Cheo Seng JinMr Shyam KumbhatMr Rajesh ChopraMs Leong Choi FoongMs Wong Lai WanMs Agnes Lim Siew ChooCompany SecretaryMr Abdul Jabbar Bin Karam Din, LLBCompany Registration NumberCR-166055Registered OfficeHarbour Place, 2nd Floor103 South Church StreetP.O. Box 472George TownGrand Cayman, KY1-1106Cayman IslandsPrincipal Place of Business5 International Business Park#05-00 Mewah BuildingSingapore 609914Cayman Islands Share RegistrarThorp Alberga2606 The Centrium60 Wyndham StreetCentral, Hong KongShare Registrar for the Offering andSingapore Share Transfer AgentBoardroom Corporate & Advisory Services Pte. Ltd.50 Raffl es Place #32-01Singapore Land TowerSingapore 048623AuditorsPricewaterhouseCoopers LLP8 Cross Street#17-00 PWC BuildingSingapore 048424Partner-in-charge: Rebekah KhanDate of Appointment: 23 February 2010Principal BankersAmBank (M) BerhadBangkok Bank BerhadBNP Paribas, Singapore BranchCIMB Bank BerhadRabobank International, Singapore BranchRHB Bank BerhadSociété Générale Corporate & Investment BankingStandard Chartered BankThe Hong Kong & Shanghai Banking Corporation LimitedUnited Overseas BankThe initial public offering of the Company was sponsored by Credit Suisse (Singapore) Limited (the “Issue Manager”). TheIssue Manager assumes no responsibility for the contents of this Annual Report.

MEWAH INTERNATIONAL INC.5 INTERNATIONAL BUSINESS PARK,#05-00 MEWAH BUILDINGSINGAPORE 609914TEL: (65) 6829 5255FAX: (65) 6829 5160EMAIL: MEWAHGROUP@MEWAHGROUP.COM